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Lower payments and negative equity.... Posted by Mike Lynch [Email]  (#81) [Profile/Gallery]
(more from Mike Lynch) on Thu, 14 Apr 2005 12:01:44
In Reply to: Mike Lynch could i get your opinion please, dedhed, Tue, 12 Apr 2005 19:30:55 Members do not see ads below this line. - Help Keep This Site Online - Signup |
So if the car you're considering sells for $25k and you're OK with a $600 payment for 60 months, than you've got about $6k in negative equity to play with as a $31k car with nothing down is $600ish at the current Saab CPO rate of 2.9% for 60 months.
Is that gonna' do it? Look up the value of your trades at KBB.com, trade in value, at "fair" condition, if they are actually in good to excellent condition use "fair" anyway to more accurately predict the market. Compare that to what you owe, established by getting an actual payoff quote.
In genereal it's tough to lower payments when someone has negative equity. By the time you add the negative on to the new purchase it puts it so far outa' whack you wouldn't want to do it.
For example a fella' has a 2004 F150 and $437 payments on an almost $25k balance, and little cash. He's gotta' be happy with a $12-15k Focus for almost the same payment. You can do the arithmetic, but the values, that is the final payment, winds up being too high in relation to what you're getting and folks won't do it. You wind up spending over $20k on a $12-15k car and not really saving that much. BTW it's tough sometimes to stack that much negative on to a cheaper car.
I always say that if you could lower payments with negative equity, you'd have a line around the block to buy from you. And folks who need to lower their payments generally don't have any significant cash to invest or they wouldn't be concerned about lowering their payments in the first place.
If a dealer can fit your negative into a lease, which is more difficult than doing the same for a purchase, than at least you've limited the damage to the term of a lease, say 36 months.
In SoCal most homeowners can re-fi to get some cash for cars or life.
, Thu, 14 Apr 2005 12:01:44 <-- Viewing This Message
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