Plus we want to buy a house soon and $650 is alot of money to through at a car. I hope I ddin't figure this out too late.

The key here is to pay off MORE than the 650, at least until your amount owed on the car is less than it's Trade in value. Then you should be able to go and trade it in with some leverage.

650 is a large payment though, you may have to start living a little lower on the material goods side of things for a while to come up with the extra. Good things to cut out are alcohol, tobacco products, dining out, and driving that big ol' truck around everywhere.

Also, be careful because gas guzzlers values are going down as prices increase, make sure your truck is really worth 22k.

Mark made some good points.

You need to know exactly what the truck is worth, so you can compare that number to your loan's payoff amount. If you have a CarMax in your area, they will value your trade-in and buy the truck regardless of whether you purchase a vehicle at their dealership or not. You can at least take it in and ask them to value it.

If extra payments to pay down the loan are out of the question, you may want to consider trading it in anyways, even with negative equity. The negative equity will be rolled over to your new loan, so you may not see a decrease in payments. Just make sure you shop around, and know *exactly* the amount they are giving you on your trade-in. Make sure, too, that you are negotiating the best sale price, and go over the new loan with a fine tooth comb (i.e. how did they come up with these numbers?).

Lastly, if you could get a co-signer on the new loan, a lower rate might help decrease your payments. I'd make sure your finances are sound before you even consider purchasing a home.

So you are saying to pay more down on the truck?
Do i pay more on the principl or does it matter?
Also, how much more? Would and extra $50 a month do much?
I was thinking of trading the truck in on a jeep liberty 2002 which sell for about 7-10k. I thought about going to GO! a large dealer here in Denver and seeing what I could get for my trade in.

thanks for al lthe help.

It depends on timing.

If you are going to be waiting a year before doing this, then making additional principal payments will help. If you are going to do this soon, then you are better off saving that money for a larger down payment.

Never hurts to talk to a dealer now, they may have special promotions or you can at least start negotiating early.

Yes, with the price of gas at the moment and it is only suppoused to go up I would definently at least see what a dealer may give you. Pretty soon they are going to be hard to sell.

So the trade in value of my Truck is $19,735 and the retail is $22,735. If I buy a car that is $8000 and I owe $23, 730 on my car loan. Will I end up refinancing $8k of the car loan?

This is my first trade in experience. I don't want to go into it blind. What should I expect to walk away with? Any tricks I should beware of?
thanks for the patience and hlep. Sorry for all the dumb questions.

if you get that trade-in value that will still leave you owing around $3000, so the car (someone check my math) will probably be financed as an $11,000 loan, the good news is that your payments will be a lot lower. Go for a 72 month lease and pay two payments a month instead of one to eat up the debt quickly, you'll have it paid off in time for your next car (ideally) or you can drive it into the ground while not making payments and putting that cash towards your home equity or some other debts you may have.

Mark, your math is correct, but you used the wrong number.

The balance of your loan, $23,730, minus your trade-in value, $19,735, equals your negative equity, $3995. This is the amount that would be rolled over into your new loan, making your total loan $11995 before taxes/fees.

Assuming you use the same term of loan as you currently have, with a similar interest rate, you could see a 40-50% or so drop in your payment.

Are u freakin kidding me?! I'd save that much !!!!!!!!!!! That is a huge price difference.

go to Calculators - UW Credit Union (UWCU) - Madison, Milwaukee, Green Bay, Glendale, Whitewater (Wisconsin) - Checking, Savings, Loans, Mortgages, Online Banking, Rates, Student Loans - Financial, Banking, Credit Union to verify that.

Yes, definitely use a calculator, I just estimated 40-50% based on the fact you are cutting your loan amount in half ($24k vs. $12k). Keep in mind there are also fees and surcharges that may increase that $12k and therefore, your payment.

Also, you might get a higher rate on the deal than you got before. So you'll have to get all the facts, and then plug them in to Mark's calculator and see how much money you'll save.

A couple of additional notes:

If you have been on time with every payment for the past year, your current lender will see you as a good customer and may be able to lower your note rate. Whether you refinance the vehicle, or get something new, good payment experience with a loan can make a great deal of difference on a rate/payment, especially if your other accounts have also been on time during the prior year.

As pointed out, trading in the vehicle may allow you to carry over a negative equity balance, but you can do even better if you find a buyer for the vehicle. The difference is $3000 in your pocket, or $50-65/month depending on your rate and term. Once you have a buyer take them with you to the dealer and finalize the paperwork. Also have a lender pre-approved to minimize surprises at closing.

Based on your numbers, it sounds like you are paying around 19% interest on your current note. If your credit score has improved with on time payments this year, you should be able to cut that rate nearly in half. With a reduction in vehicle cost to the $9000-12000 level (including negative rollover equity) and pushing it out to 72 months as Mark suggested, you could be seeing a payment in the $250 range. Obviously, this all depends on your credit score, final vehicle costs, rollover amount, and number of months financed.

A lease was also mentioned, maybe inadvertently. Term on a lease would be much shorter, so payments may not be much different, or could be higher, plus you have no equity in the vehicle, and mileage charges to be concerned about at the end of the lease. In general, I would not recommend a lease unless you are a business writing off expenses and have a regular rotation of vehicles at set mileage and months.

I got approved for another loan of $12000. But before that money is touched the Truck is going up for sale.

My payments.........DRUM ROLL PLEASE. are $212 a month IF I use the full $12000. I am so excited. I'm going to try and sell the Truck by myself first to see it I can get the full amount out of it.
Thanks for opening my eyes