My bank has informed me that in order for me to trade...?and swap titles on my existing loan..the neg equity cant exceed 125%...im confused please explain this to me and the prices i need to look for...i owe 15.8 on my car and its worth about 13-14k....explain PLEASE!! i live in md and am buying the vehicle from VA i kno tax tags and title come in to play so please help!!!!! | |
Banks don't sell cars. Using your figures and with good credit you can trade today and your dealer can get the loan approved easier than you can. I've traded with people who were $10,000 upside down. Go to the dealer and lay the cards on the table and tell him to get you done.
They are saying your new loan, including tax, title, fees & negative equity cant exceed 125% of retail value.
So lets say, for argument that you are buying a $20,000 at retail value with tax, title & fees its $22,000. They will loan you 125% of retail which is $25k.
Your negative equity affects the calculation meaning if you are upside down too much, they wont make the loan.
If you are upside down $2800, then add tax, title & fees of an estimated $2000 and your are at $24,800 which is 124% of retail. Right near your limit.
I would strongly discourage trading cars when you are upside down. You will go from being upside down by roughly $2800 to being upside down by $5000 or more.
(Using wholesale for your car)
...i owe 15.8 on my car and its worth about 13-14k
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The lender does not think you car with worth that much. That is all that matters. $15,800(ish) is 125% of $12,640. You need (15,800 - 12,640 = 3,160!) $3160 cash down upfront to even dream of a trade. I used $12,640 as your car's value, so it evidently is worth LESS than that.
I'm not sure what Dogbettor is getting at, since dealers don't lend money to pay for the cars that are sold...
