CarMax ?

[Anonymous]

How much negative equity can you roll in a on a CarMax used car that costs between 20 and 23k?  Based on the appraisal, mine neg equity is at 4,600 then with tax savings it would be around 4,200. Is it possible on a 2 to 3 old with less than 30k costing I'm the above price range? 

[Anonymous]

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@Anonymous wrote:

How much negative equity can you roll in a on a CarMax used car that costs between 20 and 23k?  Based on the appraisal, mine neg equity is at 4,600 then with tax savings it would be around 4,200. Is it possible on a 2 to 3 old with less than 30k costing I'm the above price range? 

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Even though it is not that early in my time zone, I have not had morning coffee so I may have missed something.

Where is tax savings coming from?

The law on sales taxes varies state by state, but when tax savings are cited it is usually regarding positive equity.

Rolling negative in will generally nean HIGHER sales tax not lower but to roll tge negative equity in you the sale price needs to be higher.

I do not know CarMax specifically, but negative equity is particulary challenging when buying a used car and 4,000 / 20,000 is 20% which is very likely far too high too high a percentage of negative equity to roll.

Above math assumes you are putting little to nothing down.

If you adding a cash down payment greater than the negative equity then negative equity no longer such an issue.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

How much negative equity can you roll in a on a CarMax used car that costs between 20 and 23k?  Based on the appraisal, mine neg equity is at 4,600 then with tax savings it would be around 4,200. Is it possible on a 2 to 3 old with less than 30k costing I'm the above price range? 

---

Even though it is not that early in my time zone, I have not had morning coffee so I may have missed something.

Where is tax savings coming from?

The law on sales taxes varies state by state, but when tax savings are cited it is usually regarding positive equity.

Rolling negative in will generally nean HIGHER sales tax not lower but to roll tge negative equity in you the sale price needs to be higher.

I do not know CarMax specifically, but negative equity is particulary challenging when buying a used car and 4,000 / 20,000 is 20% which is very likely far too high too high a percentage of negative equity to roll.

Above math assumes you are putting little to nothing down.

If you adding a cash down payment greater than the negative equity then negative equity no longer such an issue.

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Tax savings is on a trade regardless of equty position in Florida. I thought 4k would be a challenge to roll in on used, going to buy new Chevy Equinox with large rebate instead. 

Thanks for the response. 

[Anonymous]

You were very polite.

Thank you.
I would like to think that was one of the two worst replies I have submitted.

You get the trade in allowance as you said, but then with negative equity you usually lose some of it because the selling price has to be bumped up so that negative equity can be rolled into new loan. But then for example Ohio might have a case where maybe you do not take the penalty of paying sales on the negative equity if the negative equity is itemized properly. An explanation of the impact of negative equity covering all 50 states would make the rules of Fizzbin sound intuitive.

Rolling in $4,000 over $30,000 is clearly over ten percent without pulling up a calculator.

New cars have rebates and banks consider new cars to be better collateral so if you must carry over negative equity, new can be better than used.

[mrjerry]

Negative equity depends on your credit and income ...