Let’s say you have a balance of $500 a month on a car for another year left and want to give it back and buy a different, is it possible to return it to whatever dealer?
Is there some type of note that goes on your credit, etc?
I’m clueless about this type of stuff. Please help
Re: Car payments
you trade the car in, dealer pays off the car. If your trade-in value is more than what you owe, then that gets applied to the price of your next car, if you owe more than what the trade-in value is, then they will roll teh difference into the price of the new car.
so for $500/mo, you owe $6K or so on the car
you want to buy a car that is $25K
you go to the dealer and ask him wat he will give you as trade in value
sceanrio1- dealer says $5K, you accept, now that $1K less that you made will be applied to your next car and that car will cost you $26K
scenario2- dealer gives you $7K, that $1K u made now gets appplied as downpayment and reduces what you would owe on the next car to $24K
what you have to do is figure out a few thins
1)what is the trade-in value of your car?
2) would you come out ahead if you pay-off the car and sel it yourself..selling it yourself will give you more in general because you will be selling around retail while dealer trade in is at whlesale.
3) if you just drive it for another year and then sell it when you owe nothing on it
figure out what works best for you based on your circumstances, needs..and wants.
Re: Car payments
Talha,
You have to tell us if you originally leased the vehicle or financed it.
Second thing is, are you going to buy another car right away, or are just getting rid of a car and moving away?
If you leased it, then you can return the car to the dealer. Technically, you can pay wear-and-tear as well as early cancellation penalty and walk-away. You don't have to buy another car right away from that dealer. Although, ofcourse, if your car is well-maintained and you are buying another new model car from that dealer, you likely will get waiver from the early cancellation and all other charges.
On the other hand, if you had originally financed your car, then its yours to sell and pay off the bank. You can't "return" it to the bank/dealer. You have to make a deal. Either sell it to another private party and then pay off the bank. This way you don't have to buy a car right away. But if you do intend to get another car, then you have much more flexibility to buy the car you want, since you are practically buying without any baggage of an older car to dispose of.
On the other hand, if you do intend to get another car, AND if you are not the salesman-type and want the least hassle, then take your older car to the dealership from where you want to buy your new car. Now you will have to make TWO deals. First, like any buyer you will have to negotiate the purchase price of your new car. Also you will have to negotiate the selling price of your older car (this is not linked to what you owe on the car). This is called the trade-in price of the car. If you owe more on the car then you also have to pay that difference to the dealer. The dealer will then pay off the bank for your old car.
Some terminologies you should be aware.
There are three different price ranges of a used car.
**Retail **price of a used car is the price you pay to buy a car from dealer. Generally this is the highest price of a particular model, since dealer has cleaned up the vehicle and had done some inspections etc.
**Private Party **price is that which two non-dealer parties agree for a car. This is the price you get if you sell your car to another person, and the other person is likely the end-user of the car. This is the middle price point of a car.
**Trade-in **price is the one you get when you sell/give your car to a dealer. Since the dealer has to then stock your car, clean it etc, so this is usually the lowest price point of a car.
In all three cases, you have to negotiate like hell to get a good deal. As a private party you can not expect to get retail value for your car. Kelly Blue book (kbb.com), edmunds.com and NADA values give you all price ranges for your particular model. All use different source data so compare all values and then price your car. Do your homework, before you visit any dealership.