Trade in a newer car for an older one?

jamerob02

I currently have a 2010 Scion tC but I am considering trading it in for a 2008 Infiniti G or M series. Does it make sense to trade in a newer car for an older one? I'm getting conflicting feedback from my friends! Thanks for the help!!

Kirstie_H

Well, that's not really enough info for anyone to help you. What are the reasons you're considering trading vehicles?

jamerob02

Yeah, I guess more info would help! My interest rate on the Scion right now is 8.9% and I've had the car for about 3 years now, its worth about $3000 more than what I owe on it too. I'd really like to get a car with a lower interest rate, that and I don't particularly like the car too much any more. There's nothing wrong with the car and I'm sure if I kept it, it would be a good car since its a Toyota product. The Infiniti seems like a solid car but it is older than the one I currently have. I'm not sure if I would get a much lower rate or not the only reason I would do it is if I were able to save on the monthly payments...

Kirstie_H

Well, your very best option would be to try to re-finance your current vehicle at a lower rate - without extended the payment time. See what you can get on a 2-year loan.

I assume your Scion is still under some warranty? One thing about a higher-end car is that you will likely spend more in maintenance. I had a G35, and while I did love it, it chewed through brake pads and rotors - they weren't cheap. Also, if you do buy another vehicle, you'll be starting over with, say, a 5-year loan. That means the 2008 vehicle will be 10 years old by the time you pay it off. My G didn't need repair work, but I knew that any repair work would be more costly than on a non-luxury marque vehicle.

I do understand not particularly liking a car, though. Have you considered any other vehicles as replacements?

ateixeira

Re-fi would be good if you were happy with the car, but since you're not, and you're not upside down either....

I'd suggest shopping CPO. You can get powertrain coverage for 100k miles, that will easily outlast the new loan.

Shop for rates at your credit union, or bank if you don't belong, before you go to the dealer. Car loan rates are much, much lower now, I think the national average is below 5%.

That way when you walk in to a dealer you at least have some leverage.

Take a long test drive and make sure the new car meets all your needs and that, first and foremost, it brings a smile to your face.

Good luck!

jamerob02

I haven't really considered any other vehicles simply because my brother has an Infiniti and he loves it, he's never had any problems with it and I'd like to be in something a little more higher end that will hold its value well.

I did think about starting over with another loan but I figured, if I end up liking the car as much as I think I will then I'll be keeping if for a couple of years past that anyway, if not I probably wont keep it for the full term of the loan!

I figured if I'm really unhappy with my current car, I should just get rid of it and get a car that I really do like since I spend so much time in the darn thing (thank you LA traffic) and now's as good a time as any, before the economy really picks up!

I guess I should see what sort of an interest rate I can get first before I make any drastic decisions huh...

jamerob02

Thanks! I'm working with my current credit union to see what they could do for me. I figure since I've paid off a bunch of interest, they should like me! I also plan on taking the car (if I get it) to my mechanic so he can give it a once-over before I buy it.

If I could get around 5% that would really help on a monthly basis since I'm not anticipating not having a car payment anytime soon.

Kirstie_H

Good first step - do as ateixara suggested above - shop credit unions and such, so you'll know what you're qualified for. The dealer may be able to beat their rate, but at least you'll have an idea.

Also, as ateixara suggested, I'd shop CPO. I used to have a long city commute, too, so I understand the value in getting a vehicle that you enjoy spending time in (which is why I ended up with the G35). I'm sure you know you'll be losing some MPG, but again, make sure your budget isn't too tight to accommodate maintenance.

Since you aren't in a super mad rush, I'd check out some of the G's competitors. You might as well take a few test drives, as you might find something else you love more, or equally, that's CPO and, perhaps one you can get a good deal on - you never know.

jamerob02

Thats great advise! Thank you both!

fedlawman

Most car loans front-load the interest payments so you pay more interest in the early years and more principle in the later years.

If that's the case with your loan, you might actually end up paying MORE interest if you refinance - even at a lower rate.

graphicguy

Can't really add to what kirstie, ate, or fed has said. All of it is good advice. Personally, I'd keep the Scion and pay it off. Get a lower interest rate and pay it off. Then, do whatever you want. Don't let what others have influence your decisions. That's a fools game.

corvette

If you refinance it, the monthly payment will be lower, but you will also be resetting the clock--if you refinance for 60 months, you will be making payments for 60 months from today, plus however many months you have already been making payments on it.

The resale value on an Infiniti will not be that different than a Scion, but the Infiniti is a nicer car. Any repair cost will be higher on the Infiniti, but they are fairly reliable. Insurance and taxes will be higher on the Infiniti. I would suggest refinancing the Scion to a lower interest rate but continuing to pay the same monthly payment amount as you are now. You will end up with a car that is fully paid for sooner this way.

anonymousposts

why not consider a used TSX. It will be nicer than the Scion, just as reliable, and cheaper than the Infiniti. A G35 will be more expensive to maintain, it is a performance car, which means more expensive tires, brakes, etc.

Kirstie_H

And I can testify that the G goes through both fairly quickly. New tires for my G were about $900. By comparison, my Ford replacements were under $500. New brake pads & rotors (because you have to replace rotors w/pads on these) came to over $300, and I can't recall whether that was all 4 or just 2.