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How long do I have to keep my new car before I trade it, so I don't lose too much.

fast1968fast1968 Posts: 4
edited December 2014 in General
I bought a new 2014 Camry in spring of 2014. It's a nice car I like it but I wish I chose something else, I've been driving compact cars since I've been driving and find the Camry kinda big and it's not as good on gas at stated and the seat is not that comfortable. I'm pretty pick about cars and I really like the new 2015 Golf.

Anyway to the point I've had the the Camry for about 8-9 months and I put about 10,000 miles and it's still in new like condition I paid 20,000$ for it a five year with 0% interest loan. So I wanted to know if I traded it in now would I lose more or less then if I waited 2 or 3 years or longer ?

Second question: Or should I just put the car in paper and sell it to someone individually ?


  • steverstever Posts: 52,462
    edited December 2014
    The snap answer is "forever" but when you drive them forever (like I tend to do), you have to watch that the cost of towing and repairs (and the inconvenience of breaking down) don't start draining your bank account. The sweet spot is probably six or seven years of ownership.

    If you look at True Cost to Own, for most cars your biggest depreciation hit is during the first two years.

    A base (L) Camry with those miles is worth about $16,000 on trade, $17,500 private party. (link) So that's a good sized hit. But life is short - drive what you like. (You certainly won't be the first).

    This is the best time of the year to buy a car. I'd hustle down to the VW dealer and ask them to run the numbers. If there's a CarMax near you get a quote from them as well. If the dealer is trying to make a year end quota, you may get a pleasant surprise.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    How much do you owe on it?
  • stickguystickguy Posts: 33,360
    Steve hit my points. Perfect Carmax unit to see what they offer. You may be able to get out of it close to even, but that just represents the 8 months or so of use you got out of it.

    Guaranteed that a VW dealer can work the numbers to get you into a Golf. More expensive car (unless you get a really base model), so might have a bit higher payment. But, if there is a minor difference, and you can afford it, might as well get what you want and will enjoy instead of being unhappy for the next 5 years. Been there, done that!

    2019 Acura TLX A-spec 4 cyl. (mine), and 2013 Acura RDX AWD (wife's)

  • fast1968fast1968 Posts: 4
    edited December 2014
    More the cost of the new more they will want to make it work right ? So if for example I trade it for some like a GOLF 2015 model S two door which is almost base model, it's 17,000 approx I owe on the Camry 19,000 approx. My payment is like 350$ a month. It's a Camry 2014.5 SE by the way.

    If I were to get a new car for example that cost more like 22,000 would they want to make it work even more ?

    Either way I don't want my payment to be more then 399. My wife says though the last 8 payments of 350$ totaling 2800$ would be pretty much lost money she says and that gets her upset.

    To my original question, if I were to wait two years before trading it in would I lose less ?
  • steverstever Posts: 52,462
    edited December 2014
    Cars are depreciating assets. You'll have paid more in over the next two years but the value of the car is going to keep going down.

    There are car buyers and there are payment buyers. If you buy and hold, unless you get the rare lemon, that saves you money over the long haul.

    Some are payment buyers and focus on their monthly "rent" instead of the car price. Payments are fine, but you need to focus on the cost as if you were buying so you don't pay too much every month. Same analysis applies if you decide to swap cars. Figure out what your Camry is worth. Negotiate a good price on the Golf. Then figure out how much longer your payments will be extended (and how much negative equity will get rolled into the new deal).

    You may be a good candidate for leasing too. Instead of $2,800 in "lost" payments for the last eight months, you'd look at that as simply rent.

    Dealers like to move metal; if they have a car on their lot, they'll try to sell it to you, whether it's a base or a higher trim model. It shouldn't matter that you are going from a higher trim to a base; they'll just work the numbers to try to make it work for you.

    I dunno, the biggest issue here may be "happy wife, happy life". ;)

    What does your wife drive? Would it make more sense to trade her car in?
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    You are no doubt "upside down" on your Camry. Be glad you bought a Toyota and not something with a steep depreciation curve.

    Yes, you can roll negative equity into a new loan. Not the wisest thing to do but people do this every day. If you can possibly live with your Camry for two or three more years, you'll be a whole lot better off financially!
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    the only advantage of holding onto the car longer is that at some point you'll have equity in it--right now you are upside down, so when you trade you're going to have to blend into the new loan what you owe on the car vs. what it's worth to the dealer. So you'll have to pitch in at least $3K--$3,5K to get the Golf--that'll get blended into your new car loan, which means you'll be further upside down in the loan than when you had the Camry. So it'll be a long long time before your remaining payments equal the value of the car.

    If you hold onto the Camry, the point in time in which the car is worth the sum of your remaining payments will come sooner.

    It's really not a matter of "loss", it's a matter of what it cost you each month you had the car, calculated after you sell it.

    Right now, by trading in, you'll have a higher cost per month of ownership than if you held onto the car for a few years.

    Steve's right--you may be a better candidate for leasing, even though, in reality, leasing is generally more expensive than owning. But you get to switch every 36 months and you generally get to drive a nicer car than if you just bought one.
  • steverstever Posts: 52,462
    If you have purchased a new car that costs more than you can afford, a reporter would like to hear from you. Please send your daytime contact info to [email protected] no later than 8 a.m. PT/11 a.m. ET Tuesday, 2/10/15.
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