If your upside down on your car loan, is it worth it to buy a new car?
Just how does this work, I owe $10,000. on a kia that blue books foe $7,000. The engine is blowin and that will cost around 4,500. Saw this thing on TV that says We will pay off your old vehicle and put you in a new one and you just pay the the differance from trade in value. what is this all about and has anyone of you ever done this?
The first answerer is right, though perhaps not as coherent as you desire.
It is not worth it.
Pay off your Kia or sell it privately. Because yes, the dealer will roll the owed amount of your car into the new car’s loan amount, leaving you even MORE upside-down by the time you drive off the lot.
Remember, a new car will start depreciating quickly as soon as you drive it off the lot. But even if it didn’t depreciate at all, you’d still be toting around $10,000 of extra debt over and above what the car is worth– and that’s assuming it’s actually WORTH the price the dealer suckers you into paying for it.
I’d be looking for a way to scrap this Kia and pay it off. In the mean time, be looking for a fairly reliable used car and pay cash for as much of the purchase price as possible. If your engine is blown in your current Kia, trust me, no dealer will want to touch it when you tell them it’s your "trade-in"– not even with the proverbial 10-and-a-half-foot pole.
See if you can part-out your Kia, perhaps. Strip it down and sell the parts individually. Do NOT take the whole car to the scrap yard and sell it based on its weight. There are some components in there– the catalytic converter, power window regulators, starter, alternator, etc– that might be easily sold on eBay or Craigslist to another desperate Kia owner or parts breaker. The catalytic converter would bring a handsome sum at the scrap yard, in comparison to its relatively small size.
So to sum it up:
(1) Do not expect them to "pay off what you owe." They’ll just tack most of or all of that amount onto any new car you purchase.
(2) Keep the Kia and part it out.
(3) Buy a decent-quality used car to get you back and forth to work/school/whatever. Pay cash for it if at all possible– if not, take as small a loan as you possibly can.
(4) Pay off the balance of the Kia loan as quickly as possible. Use proceeds from the parting and scrapping of the car to pay it off more quickly. Continue making your payments as normal until you’ve saved up enough money to completely pay it off.