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Do Car Dealerships really pay off your car loan if you get a car with them?

  • I heard that if you have a car loan that you want to get out of that some car dealerships will pay off your loan if you get a car through them, and I've also heard that they could roll your balance you owe on the car onto the new car loan through them. Is this true? I have an 04 Grand Prix and I have been wanting to get a Ford Fusion but I still owe more then what my car is worth, I wanted to hear other opinions before I ask a dealer.

  • Answer:

    Depending on how much you still owe, and the car you are looking at, they might. Because you have negative equity this is not very likely. They can roll the amount you still owe onto your new loan, you would be digging yourself a very big hole in debt. If your current car is working fine, I would wait until you have some positive equity on it before thinking about another car.

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No, you will pay off the loan, but they will make you think that they are paying it off. Like this. You bought your car for $20,000. You still owe $5000, but it is a POS in a sour economy so you won't be able to sell it for more than $3000. The dealer will give you $1000 on trade in because they are taking it on wholesale, leaving you will $4000 in the hole. So, on the original car you might have done it over 60 months so 20,000/60 = 333.33/mo + 10% interest = 366.66/mo But when you refinance it, they will amortize the amount over the term of the new loan. So, 4000/60 = 66.66 + 10% interest = 73.33/mo..... not bad right? Well, if you are buying another 20,000 car at 10% over 60 months, your payment will now be 439.99/mo instead of 366.66. Not too bad, but it's every month and will cost you another 400 in interest alone in this theoretical example. Then you go to do the same thing again, and now you will have the same problem (no domestic cars ever hold their value unless they are potential collectors). Best thing to do, hold on to your current car. Unless it needs a new engine or transmission, it is better to keep maintaining your old car.

lowlevel

car dealerships are lying no good poeple. all you see is white people, if you see an indo dont ***** get a car from thier they suck

Victor

If you are upside down in your present loan, you'll REALLY be upside down in the next one and will be stuck with it because of even more negative equity. You can't climb out of a hole by digging it deeper.

Scott H

Your old loan can be paid off with the payoff amount into your new loan, or you can pay it off yourself first somehow. The old loan cannot be kept open as you will be selling the loan's collateral, your car.

John Alden

lowlevel has the best answer,

David,

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