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"Can I trade in my car to get right-side up on my car loan? "
"I bought a Nissan Maxima last year. After financing, I will end up paying $13,000 for the car. According to Kelley Blue Book, the car is worth about $5,000.
I heard that dealerships will take trade-ins, even if you are upside-down on your loan. Will trading the car in for a newer vehicle help me with my loan?
"
Johnny Puckett · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Despite what dealerships try to tell you, taking on another loan is not a good way of handling this situation. What the dealerships are offering is to take what you owe on your current car, minus whatever small amount of
trade-in
value they will give you, and roll it into what you owe on the new car. This is how that would look:Let’s say you currently owe $9,750 on your
Maxima
that is worth $5,000. The dealer gives you a trade-in value of about $3,000. That leaves you holding a bill for $6,750, plus whatever the new car cost is, plus financing charges. No matter how you look at it, this is an awful deal. The best thing you can do is pay the car off as fast as you can. From there, you can sell the car to recoup some of your money or hang on to the car for as long as possible and enjoy not having a car payment.
“
View full answer
- Gregory R.
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