Trade in with 2.5k in negative equity

[kjones2011]

Hello all, 

I currently have a 2012 Nissan Sentra I bought 2 years ago as my first car.  My credit was decent then and I recently graduated from college. 

My current loan is with Capital One with a 5.25 interest rate I currently owe $8000 and my Blue book value and black blue values amount to around $5500-6700.  And this is based on fair condition.   I recently got a 20% raise at my job and a nice bonus and I kind of want to reward myself.  When I received my bonus I paid off all of my credit cards but 2 of them that have utilization of 25% and lower.  I have not been late on none of my credit cards and have always stayed current on my car loan and student loans.  My income is 52,500 annually. (let say when I first bought this first car I was only making $34,000 so have worked hard to get to this point)  I have been approved for a loan with capital one with an interest rate between 3.68-8.58.  I am hoping to buy a car under $22,000.  I don't want a new one b/c I dont want to deal with the quick depreciation.  I would like to buy used with under 30,000 milies on it.  I'm stuck in between weither I should roll over the negative equity or just save up a down payment of $1000 by December in order to catch a year end sale at the dealerships.  Please help 

[StartingOver10]

Have you tried to get a value of purchase from CarMax? 

I have found that their offer's to purchase are higher than the trade in value IME.

You may not be as upside down as you think. It is best to negotiate the purchase of your new (to you) vehicle without carrying over the negative equity from the previous vehicle. It does nothing but create confusion and that is what the dealership banks on....

[lincar66]

I can tell you one thing I just got a dealership to give me 12500 on a car that had no business getting 10k because they had to sell a car and also got 6500$ off msrp on a brand new 2015  200s awd. My point is you are getting close to the end of the year you can get a brand new car pretty well loaded for cheap money if you find the right dealership I bet you could get a 29k msrp for 20k otd if you find the right place and hold your ground they will lose money on a vehicle to hit a incentive you just need to be that sale.

[Anonymous]

Don't go in and fall in love with a car. Keep your mind on the business of getting the best value for your trade and paying the lowest price for the car. I had a friend trade a 2000 Toyota Corolla with 175,000 miles on it, and they gave her $3,000 for it. No way it should have cracked $1,000. Be patient, and stand firm in that you want 8000 trade-in value for your car. Don't be afraid to walk away! ALWAYS wait until the end of the month, and if you can, wait until the end of the year. Dealerships get desperate and will do a LOT to make a sale. PM me if you need more help!

[Anonymous]

Congrats on the bonus and pay raises.

I agree with the others, your trade may be able to pull in more money than you think.

I suggest, with the others, that you should wait until the end of the month, and the end of the quarter, and if possible, the end of the year, when dealers are more likely to give better deals.

Consider if you want another Nissan, or what make of car you like.  My daughter wanted a Honda and she thought she should get the Honda Fit because it was small and economical.  When she went to the dealer, they offered her a Honda Civic at much better terms, and it gets nearly the same mpg.  She saved at least 3k by being flexible with the model.

I would also suggest deciding if you want to get financing before going to the dealer.  I always prefer going in with the financing arranged in advance and not allowing the dealer to use the shotgun approach to run my credit to several lenders and accumulating lots of INQs and only using one.

Waiting until the end of the year would allow your scores to come up and let you qualify for a good loan rate, maybe with DCU.

hth

[lincar66]

I would just wait till end of year and get a great deal and better financing

[Dj4Money]

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@lincar66 wrote:

I would just wait till end of year and get a great deal and better financing

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 I agree! The economy is not improving. The deals on 2015's will continue to get better as stock remains. 2016's will get better incentives if they aren't selling any faster.

[creditgambler2018]

just get a new one. it will come with warranty vs a used one of only 30 days warranty.... u can getter better rate on new vs used...

[kjones2011]

Hello All,

I have decided to wait to buy another car.  I would like to wait and builld a decent down payment to cover documentation fees and also be able to handle the trade in and new car buying process sepeartly so I don't have to deal confusing financing from certain dealerships.  I currently have a decent auto rate now (5.25 yay)soo..... the interest isn't killing me.....so there is no rush when I can take my time to find something I really love and will keep for a very long time. Thanks for your help

[kjones2011]

Yes I recently went to carmax.  I got an offer for $6,000. It still puts me 2k in the hole.