Can I use my old car as a down payment?

Good news: Your old car can be part of your down payment as long as you have car equity. Car equity means your trade-in vehicle is worth more than you owe on it. … With a 20% down payment, your monthly payment for the same loan goes down to $340—a significant difference.

Is it better to have a down payment or a trade in?

When buying a car, it may be better to have a down payment rather than a trade-in. A trade-in offers convenience to the car buyer, since one can walk into a dealership with a used vehicle and walk out — or rather, drive out — with a brand-new automobile.

How does a car trade in work if you still owe?

You can trade in a vehicle even if you still owe money on its loan. … They’ll pay off the remaining loan balance on your trade-in and obtain the car’s title directly from the lender. If you have any positive equity in the vehicle, it will be used as a down payment toward your new lease or purchase.

Does a trade in hurt credit?

Your car loan doesn’t disappear if you trade in your car. However, the trade-in value of your car becomes credit towards your loan. This credit might cover the whole balance. … Consolidating what you owe into a single new loan helps you manage your payments better.

How much should you put down on a $12000 car?

“A typical down payment is usually between 10% and 20% of the total price. On a $12,000 car loan, that would be between $1,200 and $2,400. When it comes to the down payment, the more you put down, the better off you will be in the long run because this reduces the amount you will pay for the car in the end.

Do dealerships like big down payments?

“It’s actually a split, but in most cases, dealers will gladly take your money. Without getting into the jargon behind it, the time value of money states that money in hand now is worth more than in the future due to inflation. Therefore, a big down payment will usually cause a salesman’s eyes to light up.

Should I pay off car before trade in?

In most cases, it’s in your best interest to pay off your car loan before you trade in your car. … As long as you’re not behind on your car payments, most dealerships will allow you to transfer the remaining amount of your loan to the new car’s loan.

Will a dealership buy my car if I still owe?

You can trade in your car to a dealership if you still owe on it, but it has to be paid off in the process, either with trade equity or out of pocket. Trading in a car you still owe on can be a costly decision if you have negative equity.

How does a dealer pay off a trade?

When you trade in your car to a dealership, its value is subtracted from the price of the new car. When you trade in a car with a loan, the dealer takes over the loan and pays it off.

At what mileage is it best to trade in a car?

Even though many modern cars last well past the 100,000-mile mark, what you’ll get for trading it in drops. Because depreciation is constant, it’s best to sell or trade in your vehicle before it hits the 100,000-mile mark.

Should I tell the dealer how much I owe on my trade?

Don’t tell a car dealer about your trade-in

Fundamentally, says Bill, “dealerships like to move money around. So it probably also is not in the buyer’s best interest to mention right up front that he or she has a car they want to trade in.

What is best time to trade in your car?

We recommend trading in your car when you still have equity on it. And the reason is obvious: you can have the extra amount deducted from the negotiated price of your new lease or purchase. If your budget allows you to make a down payment, your new auto loan will be reduced further leading to a lower interest.

Does cleaning your car increase trade in value?

Make sure that your car looks its best

Fix points out that a clean and well-maintained car is most likely to get the highest trade-in value. “Clean the vehicle inside and out,” she says.

Is it smart to trade in your car every year?

If you paid cash for the car you’re driving now, and don’t have another car payment, then there’s no reason not to trade your car for a new one every year – provided, that is, that you can afford to pay cash for each subsequent car purchase.

Do cars lose value after 100 000 miles?

Edmunds’ analysis reveals that vehicle values decline only incrementally between 100,000 and 150,000 miles, and the rate of depreciation is similar to the decline that occurs between 50,000 and 100,000 miles. “After about the first 40,000 miles, vehicles depreciate at a slow and steady pace.

Why you should never trade in your car?

The dealer charges a premium for the convenience it offers you to take your used car off your hands. And used cars obtained on trade-ins carry a very high profit margin for dealers when they put them on their used car lot or sell them wholesale.

Can you trade in your car if the check engine light is on?

A check engine light should not be a serious barrier to trading in a car. Some research before you go visit the dealership will allow you to trade in the car and receive the best value for the trade. … If the computer senses something that prevents optimum operation, it will cause the check engine light to illuminate.

Can a car dealership return my trade in if they find something wrong with it after the sale?

No, once you sign the contract for the new car it’s over. Besides if the Manager that appraises the trade doesn’t do a proper inspection before he gives you a trade in value then that’s on them.

Is it better to trade in car or keep it?

How long should you keep a car before trading in? Ideally, you want to keep a car for a few years after it is paid off before you trade it in. This way, you get to enjoy the benefits of ownership. If you can’t or aren’t willing to wait that long, at least make sure you have positive equity in the loan.

Will dealers take any trade in?

A car dealership will accept any car in any condition. They don’t care about dents, dings, rust, rips or stains in the upholstery. Even if the car doesn’t run, you can have it towed in as a trade. You obviously won’t get top dollar for the car, but you will rid yourself of the vehicle and all of its headaches.

How do you outsmart a car salesman?

Car Buying Tips To Outsmart Dealerships
  1. Forget Payments, Talk Price. Dealers will try selling you to a payment per month rather than the price of a car. …
  2. Control Your Loan. …
  3. Avoid Advertised Car Deals. …
  4. Don’t Feel Pressured. …
  5. Keep Clear Of Add-ons.