Financing options with negative equity on current auto loan

nejj22nejj22 Member Posts: 2
edited May 2015 in General
Hi all,

I'm making payments on a 2010 Toyota Corolla with 80,000 miles. I originally leased then bought because millage overage fees at the end of the lease were killer.

A year later, I really don't want this car and I worry about it holding up because it's taken a beating over the years. Unfortunately, I still owe about $10,000 with it's value around $6,000-$7,000.

My first question is can I secure a loan for another used car that will also pay off my negative equity? A local Toyota dealership told me they could only finance my negative equity through new or leaser loans. But I would be more than comfortable with another used car.

Example: I finance another used car for $10,000. I trade my car in for $7,000. The remaining $3,000 is added to my loan. So I end up taking out a loan for $13,000 plus interest, etc. Is that possible through used car dealerships or third parties? Also, where would I tend to find the best deal for my trade-in and rates for the new loan?

If need be I could put about $1,500 down, but I'd like to know my options first.

Thanks.



Comments

  • kyfdxkyfdx Moderator Posts: 197,641
    nejj22 said:

    Hi all,

    I'm making payments on a 2010 Toyota Corolla with 80,000 miles. I originally leased then bought because millage overage fees at the end of the lease were killer.

    A year later, I really don't want this car and I worry about it holding up because it's taken a beating over the years. Unfortunately, I still owe about $10,000 with it's value around $6,000-$7,000.

    My first question is can I secure a loan for another used car that will also pay off my negative equity? A local Toyota dealership told me they could only finance my negative equity through new or leaser loans. But I would be more than comfortable with another used car.

    Example: I finance another used car for $10,000. I trade my car in for $7,000. The remaining $3,000 is added to my loan. So I end up taking out a loan for $13,000 plus interest, etc. Is that possible through used car dealerships or third parties? Also, where would I tend to find the best deal for my trade-in and rates for the new loan?

    If need be I could put about $1,500 down, but I'd like to know my options first.

    Thanks.



    I doubt you could finance 130% of equity on a used car.. and, if you could, the rate would be astronomical..

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  • nejj22nejj22 Member Posts: 2
    Understood. What about 115% (1,500 owed). Possibly, I could pay the entire negative equity if I could pay the remaining that I don't have in cash with a 0 APR credit card.
  • kyfdxkyfdx Moderator Posts: 197,641
    nejj22 said:

    Understood. What about 115% (1,500 owed). Possibly, I could pay the entire negative equity if I could pay the remaining that I don't have in cash with a 0 APR credit card.

    That's not a bad plan, if you are intent on trading out..

    Edmunds Price Checker
    Edmunds Lease Calculator
    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

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