Overhaulin'

Any catches to an early car loan termination program?

I've received an offer from a local car dealership and they're offering to pay off my loan if I finance a new car through them - even if I'm upside down on the loan. Is there any catch to this type of program? Will they really cover a few thousand dollars in negative equity? I appreciate you sharing your experiences too.

Public Comments

1. Sure, you can do it but you won't be making your situation any better. In fact, it will be WORSE because you're still actually paying for TWO car loans now. All they do is roll the balance of your current loan into the NEW one and you're still upside down.
2. JUST AVOID AT ALL COST IF IT SOUNDS TO GOOD TO BE TRUE IT NORMALY ISNT
3. they are not covering anything you just paying for the negative equity in the old car loan into the new one, and your car payment will get bigger and in the end you will pay a lot more in interests. BTW Every car loses 25% of it's value in the 1st year, another 25% by the 2nd and depreciates further from there, especially American cars all cars go upside down eventually, no big deal if you put a big down payment and then keep the car past the payment schedule, but a big loss if you are a 3 to 4 year trade in cycle, as you will always come up short. leasing isn't much better either since few will keep a car under 10k a year in miles and have the residual high at leases' end, thereby going upside down as well and rolling the residual into a new lease.
4. Please be advised that the negative equity will transfer from the old auto loan to the new auto loan. It would be nice if car dealerships would rescue us from our negative equity situation by literally absorbing our personal financial losses as a random act of kindness, but this is the real world. Thus, the car dealership will be adding your "negative equity", which is debt by the way, to the principal value of the new car loan. The best way to solve your current situation is the old fashioned way: to pay down your current auto loan as fast as you can, keep your current car for a longer while, and when your loan is paid in full from your old car deciding if you want ANOTHER car loan. Look at the video below. Good luck.
5. Not really. What they do is roll the balance of your existing car loan into the new loan. They take the excess paid over the amount of your new car and pay your former lender. That's all. You just have a higher car payment...so that's the catch. If you just have a couple thousand left to pay on the car, you're paying on the principal now and not paying much in interest. It might be worthwhile to investigate how much you'd save monthly if you can just pay the current loan off in cash and finance the new car price only. However, no...there's really no "catch" here...you're just re-financing the balance of the original loan really by rolling it into the new loan. You'll want to check these guys out....99% approval they say. http://www.123thebest.info/go.php?link=auto Hope that helps.