How will this trade-in work?

I have two cars i want to trade in. first car's trade value is worth just over what i owe and the second is just junder what is owed.


for example


car 1 trade value $8000 owed $7500


car 2 trade value $3000 owed $4000


lets say the new car cost $25,000.


how would that work out?How will this trade-in work?
As a general rule, car dealerships will only trade one car for one car. Otherwise, someone could show up with 10 cars each valued at $2500 and walk away with a $25,000 car for nothing.


They don't work that way, they are in business to make money.





As for trading one or the other of your cars, this is what would happen:


You pick out a $25,000 car. With all the surcharges and extras, it comes out to say $26,500. They get you approved for a loan on this car.


Car 1: You have approval for a $26,500 loan with a ';net'; trade of $500. If they give you full value for your trade, then you will get the new car for $26,000.


Car 2: You have approval for a $26,500 loan with a ';net'; trade of %26lt;$1000%26gt; (meaning negative). If you get full trade value for the car, then they reapprove you for a loan value of $27,500. If you don't get full value, then your loan goes up accordingly.





What you may not understand about trading cars with a balance due on them, is that the car must be paid off before it can be sold. The note holder has a lien on that car and title cannot be transferred without the lien being satisfied. The only way to do this is to pay the balance, which most dealerships will do during the process of getting the new loan. But most will not give a full trade-in value if there is a balance, because they are in effect loaning you the balance of your loan in exchange for the trade-in plus the new car loan. If the trade-in value is $3000 and they loan you $3000, then they have given you an interest free loan. Once again, they don't work that way, there's always a profit involved for them.


Probably what will happen in the ';Car 1'; scenario, is they will pay off your loan, and give you a net trade-in of $0 for the car. That way you only owe them the new loan and they can make money when they sell your trade-in to cover the loan.


Probably what will happen in the ';Car 2'; scenario, is they will either deny your approval until you get the balance below the trade-in value, or they will take the car for $0 and add anywhere from $1500 - $2000 on your new loan.





The situation with Car 2 is that you are ';upside down'; in your loan right now, which means that you owe more on it (with interest) than it's worth. That's the problem with vehicles as opposed to property, once you drive it off the lot (even brand new), you just lost value while the loan stays the same. In the first couple of years on a car loan, the dealerships have you in a tough spot. A lot of times you can't afford to keep it, but you can't sell it for what the value of the loan equals.





Good Luck; Hope this helps!!How will this trade-in work?
Go talk to the local car seller and ask them? They will probably consolidate them.
They'll add the $500 net owed to the loan. You'll take out a loan for $25,500