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Can you trade in your new car that you still owe a lot on for a significantly cheaper car? |
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Answer
It is not a good idea to make such a trade.
The dealer will offer you significantly less then you owe, an dmove the difference unto your cheaper car. The bank may not even want to finance you because their collateral would not cover the entire loan balance. You may be able to get approved if you purchase GAP insurance when making the trade; however, there is no guarantee.
Even if you can get approved, it would not be the best choice to do so. Imagine making a $500 payment on a car that over 5 years would have had a $300 payment. You could probably keep the more expensive car for the same $500 a month.
Weigh the options. It is usually more extensive to trade the more expensive car for a cheaper one.
First answer by none none. Last edit by Criosrom. Contributor trust: 71 [recommend contributor]. Question popularity: 178 [recommend question]
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