I am not an expert at loans and car buying so here is the situation. My brother has a 2005 Ford Ranger Edge edition. He has about 38 payments left on it and has to pay about $8000 before its fully paid off. Its a loan / not a lease. He wants to get a new car - Toyota Tacoma - What can you do in this situation to get a new car. Can you trade a car in that you still make payments on? Is there any way to buy a new car without loosing money or paying off 2 cars at once?
So he only owes 8k on the vehicle with 38 months worth of payments to go....so he pays about $220 and change per month? He needs to find out how much his current vehicle is worth as a trade. Basically, it works like this.....in simple terms: After you pick out a car, the dealership will appraise your Ford Ranger Edge and make you an offer for the trade in. If they offer you less than what you owe on it (8k), they will take the negative equity (if possible) and roll it into the loan for the new car. So essentially, you are paying more for the new car than what it's is worth. It's a big game, and they will assuredly try to lowball you on the trade in, while keeping as much margin on the new vehicle as possible. But arming yourself with information helps, as does a strong will and resolve. I would recommend that you do the following: 1. Find out how much the Edge is worth based on options, mileage, etc. and go in there armed with that knowledge. You can visit a few websites to do this (www.kelleybluebook.com or www.edmunds.com). If they try to lowball you, politely let them know what the car is worth, and prepare to walk out when they are not willing to meet your price (at least half way). 2. Go in on the last day of the month. They are much more apt to wheel and deal with you if they are under the gun to make quota on units at month's end. 3. Make sure you know how much the car you are buying is worth. I would NEVER pay more than $500 over the invoice price, and that's being generous! You can get the invoice price of a car on the websites above too. 4. NEVER take the car you are trying to buy to lunch, home overnight, or anywhere else, despite their offer to do so. It will only soften your resolve and give you "new car fever." 5. If you know someone that is an accomplished car buyer and is adept at the negotiation process, take them with you. There's a lot more information I could share, but it would bore you. It's all just a silly game, but if you know how to play, it can be fun, and you can get a good deal. Enjoy.....and good luck.
