How To Buy A Car With Negative Equity

How To Buy A Car With Negative Equity – Figuring out how to sell a reversed car so you don’t lose thousands is scary. If you’re looking for a way to cover negative equity on your car, you’ve come to the right place.

In the past, I had a bad habit of trading cars with negative equity, and lost thousands each time. I’ve actually financed ten cars in ten years.

How To Buy A Car With Negative Equity

What is the definition of ownership? Doing the same thing over and over again and expecting different results? Yes, that’s me.

What Is Negative Equity On A Car Loan?

I’m sure many of you can relate. The reality is, we’ve all made stupid financial mistakes, but this one was especially costly for me.

My husband and I bought a new vehicle a few years ago and decided at some point, after financing $48,000 and a minimum monthly payment of $733, we were done.

We are so tired of paying basically the equivalent of paying for a house for a car. We already knew our credit score, so we went to our credit union.

We sat down with our bank manager and explained our situation. to pull my TONE vehicle values ​​so we can know exactly how far “in the hole” we are.

Negative Equity Just 1 Factor For Credit Risk, Lenders Say

As a former banker, I know that NADA is how banks and credit unions decide how much money to borrow to purchase a vehicle. In fact, they don’t even use Kelley Blue Book.

KBB is rubbish in my opinion. This is not an accurate assessment of the vehicle. If banks and credit unions used KBB, I might feel differently, but they don’t.

Car dealers tend to use KBB to their advantage when offering trade-in value for your vehicle. So let’s say you log into your bank. You talk to your bank manager and find out that you are $5,000 behind.

If your local bank can’t work with you, try Lending Tree. The price is low depending on credit, but you can click here to see if this is a valid option.

Car Loan Upside Down? 5 Options When You’ve Got Negative Equity

Whatever you do…don’t let the dealer run your credit. You lose all power when they find out your entire financial situation.

Now you know the value of your vehicle and you have decided that you owe $5000 more than your car was sold for. If you’ve seen a vehicle, and you have an idea of ​​what you’re looking for, talk to them right then and there.

Let’s say you find a 2009 Buick Enclave and it’s $12,000 with 90,000 miles. They can enter vehicle details into the NADA site and also give you a retail value. Sometimes a bank or credit union will lend 125% of the retail value.

It’s good to know in advance because if your position reverses, sometimes you can end up with a little negative equity there. But I would recommend gap insurance in that situation…always.

Why The Used Car Salesman Said I Had Negative Equity In My Mini

Check with your insurance company and lender to see if they offer damage coverage that covers vehicle replacement. Not all blanks are created equal, but it’s a good idea to compare apples to apples and make sure you’re not overpaying for this product.

Car dealers often make most of their money by selling life and disability insurance and marking up prices (especially on used vehicles).

You need to know your credit score before you start. You can find your FICO score here. So, you’ll want to talk to your bank to consider several options. The next place I would go after talking to your bank once you know how much money you need to spend, is Carmax.

They will give you an appraisal offer for it and Carmax will offer you to buy your car for a certain amount.

Negative Car Equity Is Rising: Here’s How You Can Avoid Owing More Than Your Car Is Worth

No b.s. This is no problem. It takes about 45 minutes for them to appraise your car and you can go there with a piece of paper that says they will buy your car for X dollars in 7 days.

So, you want to make sure that you have completed the decision-making process before doing so. But take that piece of paper… fold it, put it in your wallet, and now you go to the car dealer where you saw the vehicle. And you don’t want to give away too much information about what you’re doing.

Walk into a dealer and ask to test drive a particular vehicle. They will ask if you have a car for shopping. Don’t tell them you are in business.

Don’t lie to them, but say, “You know what? I’m not sure what we’re going to do.” So come on in, test drive the vehicle. See how you like it. And make sure you also have pre-approval from your bank, but less so from a car dealer. The more you know about your financing, the better. Don’t share your plans yet.

Negative Equity Car Finance & Car Loans

Knowing your credit score will help you get the best rates. Then you can sit down with them and explain to them that you want to negotiate the price of the vehicle. Try to negotiate a price to purchase the vehicle without including your transaction upfront.

Car dealers are going to hate me for this, but it’s what we have to do. We need to protect ourselves as consumers.

See if they are willing to negotiate the price for you and then if they are really firm about whether you want to trade in your car or if you feel weird not telling them, tell them.

Also tell them you got an appraisal at CarMax, but you’re waiting to see what they have to offer. Don’t just share offers from Carmax.

How To Trade In A Car With Negative Equity: 3 Options

You will receive an offer. They will write down some numbers and they will want you to sign something committing to purchasing the vehicle. They may ask you to start the paper.

Do not do it. Ask if you can test drive the vehicle overnight while you think about it. Take the car and go to a dealer that competes with that car.

With our other dealers, and tell them you are looking for this car, but they have something similar? And sit back and go through the exact same process as any other dealer.

If you need to do this at several different dealers that day, do so and then take the car back and forth between dealers. I know this sounds like a lot of work, but I promise you will get a better deal.

How Do I Trade In A Car That Has Negative Equity?

I could have gotten $500 more than Carmax offered me, but oddly enough, the Honda dealer where I bought the (new) car offered me $2000 less than Carmax, and they said, “Oh! We want your car!”

Because we bought it new from the dealer. It was 2 years old, and had been serviced faithfully, so they were able to make it a certified pre-owned vehicle on their lot for about $4000 or $5000 more than what they were offering me.

I hope these tips help you understand a little more about how to sell a car upside down. You obviously need money.

I would not recommend using a credit card to offset negative equity…even a 0% credit card because…it’s not a good idea.

I Want To Sell My Car But I Still Owe Money

You can tell yourself that you will pay off the balance within the promotional period, but that is too risky. It is very difficult to get an unsecured loan if you have A+ credit and interest rates are usually very high on this type of loan due to the risk involved.

There are many ways to make extra money either from home or by finding another job or starting a side hustle. These are just a few ideas.

If you’re thinking about selling your upside-down car but are worried about finding a reliable vehicle for your family’s needs, here’s a list of third-row options for large families. You can also look for an AWD option if you live in a snowy area.

These are all mid-size SUVs with available third-row seating. We have a Buick Enclave and love it! It’s about 9 years old but has leather, heated seats, backup camera, Sirius XM radio and AWD, meeting my family’s $10,000 needs. If you can find a good vehicle with a lifetime warranty at the dealer (no extra charge), this is the way you want to buy your “Dave” car.

How Much Negative Equity Can I Roll Into An Auto Loan?

In short: talk to your bank about your options. Go to Carmax. Get your food. Use your judgment as leverage and take that knowledge with you as fuel at other dealers so you can get the best deal when shopping for a more expensive vehicle.

Let me know if you have any questions or comments! I hope this helps you understand more

Life is a collection of memories and experiences. There are ups and downs. I am very grateful for God’s grace and

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