Overhaulin'

New Car with upside down loan?

I currently have a 2001 nissan maxima with about 7800 left on its current loan and 146k miles on it. Now I would not consider buying a new vehicle due to what I know of how purcasing a new vehicle while upside down can put me in a worst situation. The thing is here the only reason I cant keep this car is because for the past year I spend alot more money to keep it going. It seems to always have a mechanical problem and Is gettin to a point that soon i KNOW it will break down on me. I would like to buy a 2008-2009 toyota corolla. I just want a reliable vehicle and I personally wouldnt mind the long-term loan, because i plan to keep it a long time. Is it still possible for me to buy a new car and keep my monthly payments 350-400 per month. I know the main thing to do is to keep a car until it is payed off or until its worth more the payoff amount.. but im in a situation where i dont think i can do that... I would really like to know what kind of options do i have here? thank you

Public Comments

1. Keep watching for new Toyota incentives. You will definately start out upside down on your new ride, but if you buy a brand new car, you could be eligible for at least 3K in cash back which would reduce what you are upside down. Right now you can try to find a new 2008 or you can wait until the 2010 cars come out and get a 2009.
2. From a dealer you should expect about $3500-4000 on trade for that Maxima, tops. That leaves about $4000 to be dealt with. That is not a small amount of negative to try to hide. About the only way to do it is with new car incentives. When a bank lends, they look at a figure called the advance. That is the amount of money lent, in proportion to the value of the car. Lending $10,000 on a $10k car is a 100% advance. Lending $8,000 on a $10k car is an 80% advance. What you are looking for is called an over-advance - you want the bank to lend MORE than the value of the car you are buying. If you buy a $12,000 car and want to roll that $4,000, you are trying for a 130% advance. That is not going to happen in todays credit climate. banks are tight now. 100% advances are tough unless you have perfect credit. Overadvances are almost completely gone. You need cash down, some 'skin in the game' if you want to buy a car. If you can find a car with a $4000 rebate, that rebate will eat up your negative equity from the trade. So they are lending $4k more than the price of the car, but the rebate counts as $4k down - cancelling out the negative. Trying to get into a used car with $0 down, and rolling $4k in negative to boot is not going to happen. Which is lucky for you. Sure, you have a newere car, but you are so buried you wont find daylight for 6 years. Best advice - look for a new car with a strong rebate. Better? Pay this thing off and drive it til it drops. $0 per month is better than $400/month any time.,