hey all,
I really cannot figure how the math works out here so asking for some help.

I am currently trying to trade in my s2000 for something else, a used car, at the certified used car dealership. The new car's ticket price is 17000, and they put $10100 for my trade in value.
And I still owe 12700 to the bank for my loan. The dealership agreed to pay it off for me.

So.. The dealer was saying they worked on the price to lower my negative equity by giving me another 2000 on the value of my car, which makes it 12100. this makes my negative equity 600 bucks.
They also told me that they tried to lower the car from 17000 to 15500 for me, which is a good thing,.

So in my common sense wouldn't the total price be 15500 + 600 (left over negative equity) = 16100?

Somehow they put down 19000 on the paper as the total price. After I came home, I just thought somehting was not right with the math. I just don't know how the total price went up to 19000 out the door. I wouldn't think tax and registration would cost almost 3000 bucks.

Am I missing something here? Could anyone who is familiar with trade in tell me what is going on here? Any help is really appreciated.

thanks,

 

When you're trading in a car with negative equity for a more expensive car, the math breaks down right there....

 

I don't really understand this.. can anyone explain how this works?

 

Trading in a car with negative equity is never a good idea, there are so many ways they can "hide" money. Unless you REALLY need a different car, just wait until you have positive equity or sell it private. With as much as they have made it seem that they are "giving" on the price of the car, something is up. They are always making money somehow

 

thats what I thought.. but I just cant figure out how it came up to 19000.

 

Ask them. However, your math is right. You shouldn't be paying $3K to cover taxes, title, license, and dealer fees.

 

Yeah, ask them. If something doesn't look right or you're not satisfied with something, ask them to write it out in full details.

 

It's entirely possible they just made that number up.

A while back I was going to buy a new car. For easy math lets say the car was $20,000. So I looked at all the dealer forms and saw all the charges they were going to tack on. It was going to be something like $20,k + dealer fees then add tax then add registration. So lets assume $400 in dealer fees. Again not the real number but it was quite a bit they were tacking on. Ultimately I only care about out the door costs so I don't care if the car cost $1 and the dealer fees are $20,399.

Adding tax (say 5%) brings us to $21,420. Now it turns out I qualified for a small rebate of $500. Well the way this should work is the rebate should be subtracted before tax is added. On their form they cheated and added tax after the rebate. In the end that was an extra few bucks of profit as the taxed sale price was the after rebate price. Anyway, so now the number looked like this on their form:

$20,000 - car
+ $400 - fees
+ 5% tax

 

Sounds like they jacked up the price on the car by what they increased the value on your trade in bay. Eg, they just shifted that $2000, sometimes that's to appease the lender. Especially now they don't like paying off thousands of dollars on trade ins and rolling that onto the purchase price.

So, car = 17,000 (reduced to $15,500) trade in = $10,100. Magic nothing happens and suddenly car = $17,500 trade in = $12,100. Nothing's changed, the car you're buying is still $5,400 more than what you're trading in.

And then you still owe on your S2000. $12,100 + $5,400 = $17,500. TTL + dealer fees make up the rest.

That'd be my guess, but then you have the paperwork, not me.

 

That seems very plausible.