Ziay!

John F

I currently have a secured personal loan on my car .. still payout figure is at $22,000.. i no longer do not want this car and want a better car...

so i figured i should trade in the car for the new car, the car dealer has told me he will take the car for $17,000 and pay it out for me..

which means i will have $5000 balance owing to the bank.
the new car i want is worth $30,000 .

and i do not have the extra $5000 to payout the balance,

what are the best options for me to do,
i was suggesting the car dealer pays the full payout ($22000)
and i will do a refinance on $35000

is it doable?

Halo_effect

If you don't have the $5000 to pay out the balance, you probably don't need a $30,000 car!

Jeff

There's no reason anyone in this country can't retire a multi-millionaire.
$500/month for 40 years in a Roth IRA invested in mutual funds will turn into over $3.5M

But, some people fall into the
"I want it, but I can't afford it, so I'll go deeper into debt to get it NOW" trap, especially when it comes to cars.

If you want to stay broke the rest of your life, go right ahead and do this.

--------------

I'm guessing here, but if you still owe $22,000, and the dealer will buy it for $17,000, then you probably own a 2006 that you bought new for $30,000, and that you have a 6 year loan on it.

If that's true, then your payments are currently $525/mo and you have 4 years to go.

The new loan would be $35,000.
$35,000 * 8% = $545.52 * 7 years.

--------------------

Here's the reality:
You're upside down on your current car.

Here's my plan:
1) Borrow about $8,000.
2) Sell the car, and pay off the whole mess.
3) Buy a car you can afford ($3,000)
4) Take $250 of the $545 you'd be paying on the new car, and pay off the $8,000 in 4 years.
5) Take the other $295, and put that in the bank for 4 years.
6) For Years 5, 6, & 7, put the whole $545/month in the bank.

That gets you $33,780 in the bank, plus maybe a thousand in interest.

Then, go car shopping. (You may not want that new car as much if you have to hand over a couple pocketsful of benjamins.)

What do you do once you drive a paid-for car?
Put $500/month into a 401K and/or Roth IRA.

daisy

The chances are not good for the dealer paying out the whole $22000. If your car does not depreciate too much, the best thing to do is keep paying on your car until the payout is close to what the dealer will give you. Right now is not the best time to get a new car, unless you can come up with the $5000.

Marvin M

Did you buy or lease?