Right now I have an 06 Cobalt LS and I want to trade it in for a Cobalt SS/SC but i still owe a decent amount of money on my car so what will happen when I go to trade it in. Like will the remaining balance be added to the monthly payments of the new car? This is my first car so I've never traded one in so if someone could help me it would be much appreciated

 

If you owe more than your car is worth then you will have 'negative equity'. Lets say your car is worth 10,000 and you owe 12,000. That means your new car will cost 2,000 MORE. If you only owe 8,000 then your new car will cost 2,000 LESS.

If you have negative equity then you'll need to come up with as much money down as possible. This is a good idea anyway because it will get you approved for one, smaller interest rates for two, and a smaller monthly payment for three.

If you can't come up with money down you may need a co-signer. There isn't anything wrong with having a co-signer. It helps you get approved and get lower rates. It also allows you to build credit.

Good luck.

PS. I'm a sales consultant.

 

Thank You. I think I still owe about 11-12,000 and I can probably get about 9,000-10,000 for my car so I'll probably get screwed a little. So I guess if I put like 5,000 down on the new car and have one of my parents co-sign on the loan with me the payments might not be too terrible right?

Also +rep for helping me out so quickly

 

Hey, no problem man. Are you buying a new SS/SC or used?

 

I was hoping to buy a new one but I might have to look into a used one. I just need something faster lol

Would you recomend one over the other from a financial standpoint like would one have decent advantages over the other?

 

you should try to pay off a good chunk of your LS and get it under what its worth

or save money up to put down on the car

either way you should try to equalize the trade in

 

i got approved with a cosigner and a negative equity trade in of 6 grand...

 

New cars come from rebates and 5 year 100,000 mile warranties. They also have a higher re-sell value (trade in value) in the future. Another advantage is you can get Exactly what you want. They may be able to order it or they can 'dealer trade' for it. If they trade for it there might be a delivery charge but again... it's exactly what you want.

Things to watch out for in any used sports car is weather it's been driven to hell and back by the previous owner. There is also considerable mark up in used vehicles. There is very little in new vehicles.

Go make small talk with the parts department and see how much it would cost you to buy Stage 2. Go ask the service writers/mechanics if they have any experience installing it. You may never intend on buying GM's stage 2 or having them install it, but this is a good way to get feedback on weather your dealership will work with you or not.

What was your APR?

 

You're not all that great of one. Forgot to mention, if he had his last loan through GMAC and he has never ever been late on a payment, then he'll be approved without a problem, he won't need a co-signer.

Also, the person at the dealership has some control over the interest rate, so fight for the lowest one!
I've seen tons of people roll over an accept 12% or higher just because they were told they have "a low credit score and a few bad marks", these people could have easily gotten around 10% if they demaded it!

 

/yawn... ok. I'd say the personal insult wasn't necessary. I guess I should have put the "it's getting late i'm tired if I forget to mention something My Bad" disclaimer in there.

What Shawn672 is trying to tell you is that the finance manager makes money of how many points over the actual interest rate you earned he can sell you.

Example: You have great credit and with your co-signing father and your nice down payment GMAC will award you 4.9% APR. But you don't know that yet. The finance manager will tell you that you where approved for 7.9%. You'll ask him if thats the lowest rate you can get. A good finance manager will tell you something like "It's a very competitive number for the market today." A bad one will spew out a bunch of bullshit like Shawn672 said.

 

Finance guys always talk down to customers, don't go there. You may be one of the very few good guys out there, and I give you credit...but 90% of you guys are out to make money, it's no different then a salesman at Bestbuy selling you some outrageous $500 "extended warrantee" on some goofy laptop

No disrespect but I hate finance guys

 

i love being a member of the cobalt family but i regret trading in my lancer, i owed 10k they gave me 5 for it so 5k went into a ls and my interest rate is a 11.5 or something like that. so im paying 20k for a ls but i needed something with my name on it to help build my credit thats why i did it.

 

hah just be smart about it you'll be fine.

my buddy had a dodge truck (first car financed)
-> lancer oz rally (2nd)
-> chevy 1500 06'(third)
-> and his CURRENT 28k lancer ralliart. this is the $hit i think about when i hear negative equity haha good luck with the ss/sc.

don't get me wrong, i have faith in my friend that one day he will be driving that Evo of his, haha after signing a 70k loan...

 

Just keep the LS. Judging by the other posts in this thread, the only ones that really come out ahead if you trade will be the dealership.

 

None taken. I understand where your coming from. I myself wasn't a finance guy, just a salesman. The best way to beat the finance guy is to pay strait cash. Or, tell them how much money your putting down (as much as possible), and have them print up a presentation. Take it to your bank and have them look at it. They can tell you what they think your car is worth ect. If your family has done alot of business with them then you'll have good credit with them, even if your credit score isn't that good yet. And they won't lie to you about what rate you'll get.

Dealerships have to come out ahead somewhere. Basically they make money in two places (care sales wise). On 'The front end' and 'the back end'.

Front End = Gross over invoice.
Back End = Finance earnings, warranties, GAP, ECT.

I'm 21 and have owned 4 vehicles. An 85 Bronco, 97 Monte Carlo LS, 01 Mitsubishi Eclipse GT, and my SS/SC. On the Monte and the Eclipse I opted to take out a loan for half the price of the car, even though I could have bought them cash up front. Now I have 0% APR on my SS/SC.

You have to give a little to get a little.

 

just a suggestion, i dont know what they prefer, but if you have like 5000 dollars, just send it in to pay off some of your cobalt, or send in like 4000, so you actually have good equity on your car and a 1000 dollars down

 

It's the difference that matters. The end result in both cases will be the same. The term 'negative equity' just sounds bad.

 

all im sayin is the negative equity from all the times he traded in those cars added up. now he has a loan on a 17-18k lancer for around 28k. hes giving alot for a little imo.

 

I agree. If he has extra cash income he could consider paying against the principle. In other words... paying extra money that doesn't go towards interest, but instead lowers your monthly payment and the amount of interest you have to pay in the end.

 

yeah sounds like that would be a solution.

 

Well I did a little research and I believe I owe about $8,000 on my car yet and with any luck I will get $8500-9000 trade in which will be good. I will also probably but about $5000 down on the car.

If my dad co-signs on the car with me whose credit score is the loan based off of mine or his?

And the car I am looking at is 22,685 so do you think I will be able to get monthly payments around $300.

And finally my last loan was through GMAC.

Thanks for all your help everybody.

 

With 5000 down you really shouldnt have a problem getting those monthly payments