I have decided to move on to something less expensive while my Wife is Nursing School. The plans is; I will drive whatever car we buy (for about 2 years) then she will take over the car when she starts working, allowing me to get whatever I want. A local Honda dealer is offering me 21k in trade for my 2007 S with 8000 miles on it. I would say it's in 98/100 condition. My payoff is $23200. I could sell it but in this economy, who's looking for a toy without the aid of factory financing?? I hate to roll negative equity into a new car but fear I may have little choice. Opinions?

 

i would go to different dealers and see who does the best deal,does your state do taxes on the trade difference? if so it would be better to trade it in and save the tax on your trade.when i traded in my cobalt there was a $3500 difference between dealers.good luck.

 

i'm guessing you financed over 60 months? at what % interest rate? are you 20-24 months in? honestly, if you had to take a ~$2,500 hit just to get rid of it, you should consider holding onto it, unless you're trading it for other reasons (need a bigger car, etc).

i have to run to work so i can't run the figures, but someone else here can. how cheap of a car are you going to be buying? factor in the interest over the remainder of your current loan, plus the thousands of dollars you'll lose by covering the payoff. if you buy a used $10k civic, i'm guessing you'll still finance, and used car APRs are generally 2-5% higher than new car loans. plus, if you finance over another 5 years, you've just reset your car payment clock.

that said, i think $21k in trade-in is a decent figure, at the moment. is the issue that you cannot afford the monthly payments right now? i'm guessing they're around $550/mo?

 

Take the best of both worlds...find a buyer for the car (autotrader etc). Check with the dealership to see if they will sell the car to any buyer that you bring for the price that you want. Trade the car in for that price and then your buyer can purchase the car from the dealership, they arrange financing, additional warranty etc with the dealership. The dealership should be able to make on the finance deal with your buyer.

I presume that in your state you only pay tax on the difference between the purchase price and trade-in amount.

 

It's actually a lease. I have the option to sell it or trade it so long as the bank gets their payoff. My payment is only $390/month but as you can tell, even at my monthly payment, the use I get out of it hardly justifies the cost. Honda is offering $200/month lease on a Civic ex. While not my favorite car, it will be a great long term car for her when she is done with school and will allow me to have one, inexpensive car rather than 2 costly vehicles (s2000, 14mpg Jeep) while she is in school

 

Hmm that sounds like a good amount for the car im trying to do the same with my CR. They offered me 24k but i owe 34k so i would roll 10k of negative to the truck i want to get. Thats the only thing holding me back

 

$2500 hit = $190/month hit for 13 months, ignoring interest.

If they want $2000 down to give you that $200/month civic, you're looking at another 11 months yet. So you'd be driving the civic around for 2 years BEFORE you save ONE DOLLAR. Only after that it starts to be $190/month more to drive the S.

Assuming you like it better, I'd keep the S2000. There's no sense downgrading to save $200/month if it costs roughly $2400/year (up front!).

 

Honestly, I'm surprised a dealer offered you $21k on a 2007. Nothing against the car, with only 8k it's like new I'm just use to dealers really low balling on trade-ins.

I'd recommend trying to sell it privately. It can't hurt to list it on autotrader or ebay. In the last 2-3 yrs I've listed many cars (e.g., Audi TT, A3, 328i, Scion xB, etc) on autotrader/ebay with great success.

Even if you were to get $22k for it privately, that's still $1k more than the trade in value.

Heck, post some pics here

 

In some states, he doesn't have to pay taxes on the value attributed to the vehicle. If that's the case, say state tax is 7%, he'd have a (7%)x($21k)= $1470 incentive to trade in. If that's the case, $21k=$22.5k with a new car purchase.

And on your point, I agree completely--trading in generally hoses you on the price. Also, sometimes dealers can use this leverage and credit a high trade-in value but not negotiate a penny below MSRP (or whatever high mark)--that could be another element in the deal there. If that's what's going on, $21k trade-in plus overpaying on the car would probably be a net loss.

 

sell private. there are still plenty of people out there with money