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JUMP TO TOPIC
- 1 Can You Trade Your Car in With Bad Credit?
- 2 Frequently Asked Questions
- 3 Can I Trade In My Car at Jiffy Lube With Bad Credit?
- 4 Can I Trade in a Mini Cooper with Bad Credit for a New Car?
- 5 Conclusion
Can You Trade Your Car in With Bad Credit?Yes, you can trade your car in with bad credit but it depends on a few factors such as the equity you have in the car. If you have positive equity in your car, then the trade-in shouldn’t be complicated, but if the equity is negative, proceed with caution. Equity here means the difference between the car’s worth and how much of the auto loan you’re yet to pay. If what you are left to pay is less than the car’s original price, then you have positive equity, however, negative equity is when you owe more money than the car’s price. Negative equity is sometimes referred to as being underwater or upside-down by some moneylenders. You can pay off the negative equity with cash, with a loan, or add it to another car loan. In the past, moneylenders were reluctant in dealing with people who wanted to trade in their vehicles with bad credit, but today a few subprime lenders will consider such a risky trade. Thus, you need to look for dealerships that will pay off your trade no matter what you owe. However, as we already highlighted, you need to exercise caution in deals involving trading in your vehicle even if you have bad credit.
– Trading In Your Car With Bad EquityIf you are upside down, we advise that you put off any desire to purchase a new car until you’ve paid off the loan. However, if you really need a small car, probably because you’re struggling to pay off the loan on the bigger one, then that might not be a bad idea. Others trade in their vehicles because the new car has high insurance rates that’ll help offset the cost of the old one. Some also try to trade in an expensive car for a far cheaper one, which is also a great move. When this happens, you’ll need to provide the trade-in value and the negative equity amount. For example, let’s say your car’s trade-in value is $9,000 but you’re left with $10,000 to pay on your car loan. The trade-in value of your car ($9,000) covers most of the loan you owe, therefore, you only have to pay $1,000. Most money lenders would suggest that you include the negative equity of $1,000 in the new car payments as part of the loan options. Though this might be convenient, it is not the best as this will create a bigger loan amount with its resultant interest rates. Also, rolling over the $1,000 will mean that you start the new loan with negative equity. However, if you don’t have the money to pay off the negative equity, then you can allow them to roll it over into the new auto loan. This is better for people who are purchasing new cars that are cheaper than their old ones and with lower interest rates.
– Trading In Your Car With Positive EquityAs we already discussed, positive equity is when the trade-in value of your car exceeds the remainder of the loan amount you’re yet to pay. For instance, if your trade-in value is determined at $6,000 but you’re left with only $4,000 on your loan, the difference of $2,000 becomes your positive equity. This means that you can use that $2,000 as a down payment for the new car that you want to purchase. You’ll then need to pay the remaining cost of your new car, which you can do either with cash or a loan.
– Circumstances To Rollover the Negative EquityYou can only roll over the negative equity into a new loan if you have no means of settling it. However, take note that you are paying for two vehicles, which is the price of the old car and that of the new one, during the new loan period. Aside from that, interest rates on bad credit vehicle loans are high and that’ll compound your financial woes. This is made worse by the fact that you’re paying interest rates on the two car loans. We advise that you avoid rolling over the negative equity into your new loan if you have the means to. However, if your new car has high insurance rates that’ll help pay off some of the auto loans, then you can go for it. One way to avoid all this drama is to sell off your vehicle and use the money to settle the existing debt/loan. Depending on your negotiation skills and the condition of your vehicle, you can get a better price to help you clear the loan.
– Details of Trading in Your Car for a New OneThe process of exchanging an old car for a new car at a dealership is referred to as a trade-in. Usually, the value of the old car is subtracted from the new one and if there’s any difference to settle, the seller does that. However, when the old car has a loan, it is the dealer who inherits the loan upon purchase of the old car. The dealer also handles all the paperwork concerning the transfer of ownership. The seller must contact the auto lender for the full payoff amount, which is different from the loan amount that is left to pay. The seller is required to bring proof of insurance, a printed copy of the old car’s value, the vehicle registration documents, the information on the loan, car keys and driver’s license. The seller then negotiates the price of the car they are selling with the dealership and they both settle on an agreed amount based on some factors. To get a good price, the seller should look up the current price of their vehicle by checking online pricing guides. Then they subtract the price of their car from the current pay-off amount to determine whether they have positive equity or negative equity in the vehicle they want to sell. Of course, the car dealership would also have its pricing system, thus the one with the better negotiating skill wins the day.
Frequently Asked Questions
1. Can You Trade in a Financed Car for a Cheaper Car?Yes, you can trade in a financed car for a cheaper car but keep in mind that you’ll still have to pay the loan amount on the old car. However, there are several pros and cons of trading in a financed car, so make sure to do thorough research.
2. Can You Trade in a Financed Car for a Lease?Yes, you can trade in a financed car for a lease just as in the case of trading in a financed car for a new one. Get the trade-in value of your car and check whether the trade-in value is higher or less than the remainder of the loan.
Can I Trade In My Car at Jiffy Lube With Bad Credit?
When it comes to trading in your car at Jiffy Lube with bad credit, the possibility exists. However, it is essential to note that Jiffy Lube focuses on oil changes and vehicle maintenance rather than car trade-ins. While you won’t be able to execute a car trade-in, you can still benefit from their services by bringing your own oil for an oil change.
Can I Trade in a Mini Cooper with Bad Credit for a New Car?
ConclusionSo far, we’ve discovered the answer to the question of whether or not you can trade in your bad credit car for a new one. Here is a summary of our thoughts:
- Yes, you can trade in a car with a bad credit score for a new one, but you will have to first determine whether you have positive equity or negative equity.
- Positive equity is when the trade-in value of your car is more than the pay-off amount on your loan.
- Negative equity is when the trade-in value of the old car is less than the pay-off amount on the loan.
- When you have negative equity, you can allow the loan company to roll over the old loan onto the new one or you can just pay it off.
- The best method is to pay it off if you have the means, but if you don’t have the means, then roll it over, but keep in mind that you’re getting a larger loan with a higher interest rate.
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