Ok, I’ve tried to figure this one out myself:

• We have a car that’s worth approx. $10k as a trade (from Edmunds).
• We owe about $12k on it at present (our current loan).
• We are considering buying an 05/06 SUV – should be able to get one for around $10k.

How would the financing work on this (with the trade being worth the same as the car we are looking to buy)? Would we just transfer the loan to the new car but continue paying as if it was a $12k loan?

Not sure if this is a noob question or not, so for those in a bashing mood: *Puts flame suit on*

 

most likely you would end up paying the same 12k. what will happen is they will take a your trade in and then what ever is left on that loan would be added to the new loan on the suv. i would suggest trying to sell your car privately because you would have a better chance getting more than trading in.

 

When you trade the vehicle they will offer you the trade, then subtract from that what you owe to fiance the loan for.

So if you owe $12,000 and they offer you $10,000 for trade in.. That extra $2,000 usually get's applied to the total of the new car to be financed.

You purchase a new SUV for $10,000 + $2,000 you would still be financing $12,000.

5 year loan with 6% interest your looking at about $212/mo