Quote:
Originally Posted by huennekc
Hi I have a question maybe a dealer on here might be able to answer for me. I want to get one of the new Camaros and use my car as a trade in, but I'm upside down on it, how much will dealers usually work with you in that situation?
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I really wouldn't buy if you are upside down but this is how it works according to some of my car salesman buddies.
In order for a dealer to take possession of a car, they have to pay the car off in full. Let's say you owe $15k on the car but the dealer is only willing to give you $10k for it. For him to get possession of the title so he can resale it, he has to pay off the full $15k now but since he's only willing to spend $10k you now owe him $5k. This $5k then gets added onto your new car that you are buying. Dealing with upside down cars are a big pain in the butt and require a lot of time and effort. In order to compensate for this, most dealers will add an extra $1-$2k or jack the percentage up 1-2%.
If someone insists on trading in a car they are upside down on, it is advised that they either a) pay off the amount that they will be upside down before they trade it in or b) add that amount to your down payment. If you don't do one of these things first, you will be paying double interest payments.