My dumb credit union is taking forever to answer my question. Its been 2 weeks now. Do any of you guys know if I can sell my car at less than amount owed on the loan? I dont see why i couldnt just keep making payments on whatever is left after I put the sale moneys back into the loan. Also would I be able to take out another loan if I had like 2000 left on my old loan? I just want to avoid trading my car in because I know dealers screw you over the most on that.
thank you
-rob

 

If you sell it for less than you owe, you will not be able to give whoever bought the vehicle the title.

Usually a dealer will try to throw whatever is left over on top of your new loan, effectively making your new loan amount more than most lendors will allow you to borrow for whatever you want to buy.

Thats when they approach you to make up the difference instead of working their price down.

 

ya your credit union is the title holder for right now.. if you sell your car to joe smith for less then you owe your credit union will not hand over the title cuz its still theres.

 

if you talk to your dealer you could do this.... sell the car for what ever privately and then have them over advance the new car and cut you a check back to pay the remaining deficiency...

 

Don't do it. Either come up with the difference or keep your old car. The dealer will add the amount to your new loan, which will make it a higher risk loan with a higher interest rate and you will be deeper in the hole the next time you need to buy a new car.

 

huh????????? what are you talking about?

its not a higher risk loan and it isnt higher interest....he isnt doing anything except getting over advanced x amount of dollars on the loan and getting a check cut back to pay the deficiency... he has the negitive equity now... where you think its going to go? is it going to miraculously disappear?

either way he is going to have to pay it. either now or later....

but it is in no way shape or form a higher risk loan with a higher rate.... your credit determains rate... not your car or any negitive equity

 

Sorry John, I'm really not stalking you
I just click the "Todays posts"link

Anyway, I do disagree with you here, well not as someone seeking a loan, but from an insurance or financing company perspective.

Giving loans at 100% is always high risk. If you want to buy a new car, and still add your remaining debt of your previous car, you will then be loanning say 110% value of the car, this is indeed higher risk than say financing 50% or 60% of a car.

The at risk portion of a car is The Purchase Price - Second hand resale price.

Lets say 30 - 20 = 10 grand
so the risk dollar value to the financing company is 10 grand.

Now is we add 5 grand left over from previous car, the at risk portion is now 15 Grand, etc etc. Alot of finance companies will charge a higher interest rate in this instance.

If like me, you finance say 50% of the car, then the resale value is higher than amount owed and you can get a good reduction in interest rate, because you will be a lower risk client. Thats how it works down in my world anyway.

This is not true however if he takes insurance that covers that difference, but again this is more cost and more monthly payments.

Not every insurance company will behave this way, but neuro512 does have a valid point though.

cheers

Odin

 

yea, im thinking about just selling my 04 yamaha r6. Thatll be a good chunk off the old car loan, and will let me reduce the price Id accept for my old car. Thanks for the help guys.

 

i know you arent stalking...lol..but i do this for a living, i do know what im talking about.... but the bank doenst look at it like you mentioned unless the credit is poor like i posted earlier...banks like wels fargo, hsbc, c&f, americredit, and cap one WILL charge higher rates for more advance. im not going to argue there because its true and i posted that earlier (how ever their spread is only about 3%. 90% ltv= x% 100ltv=x% 110=x ect up to as high as 130%

your credit decides your rate just like i stated before.. if you are good credit. banks like NMAC, BOA, Citizens ect give each teir as far as credit goes a max advance and a rate. example NMAC will only give up to 110% advance on tier 3 at 9.24% x 72 on new, but on tier 1 you get 130% x 7.9 x 72 on new.

their is no higher risk for one or the other in the banks eyes

oh and for the the rate break you were talking about if you only finance 50% of the car is only 1/4 of a point off of rate and you only need to have equity in the nw loan.... any thing under 90% of the value (equity discount)

 

Actually I have the same situation. Im parting out my car and I should be making 4-5k easy. I'll be trading in my car and I'll be upside down by 2k. What I'm going to do is just apply for another loan and make up for the difference on the other car.

 

Why not just pay the 2k and be done with it and start over. That would be your best bet if you have the ability to pay the 2k. Whatever you decide best of luck. What kind of car are you getting?

 

I currently have a Mazda RX8 and I want a Z!

 

Good choice, you won't be disappointed. Welcome

 

You can sell your current vehicle for any amount that you wish.

Why can you not continue making payment on a car loan when you have no car? Because you have no collateral.

Yes you can borrow more money.