Buying the wife a new car in the next couple of months and have a question on trade-in and down payment. Payoff on her current car is a shade under $2000. I have about another $5000 cash to put down. Would there be any benefit to just paying off the current loan with somenof that cash? Trade-in value I'm guessing is around $8000. I assume there's really no difference, but I've traded in a car with a balance still outstanding on the loan so wasn't sure. Interest rate on current loan is 3.9 if that matters. Payoff once she decides what she wants will probably be closer to $1000.

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Posted by hungryone

river parishes

Member since Sep 2010

11987 posts

Posted on 3/26/15 at 4:49 pm to The Spleen

Payoff would allow you to sell it privately. Depending on make/model and market demand, you can sometimes make significantly more money in a private sale vs a trade-in. It is easier to sell a used car than you think (at least in my area).

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Posted by LSUtigerME

Walker, LA

Member since Oct 2012

3809 posts

Posted on 3/26/15 at 7:51 pm to The Spleen

You'll save the remaining interest on the loan balance (not much), but only what you'll pay between now and the transaction.

Otherwise there's no real difference. Tax treatment is the same. Slightly easier with title in hand, but that's a non-issue.

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Posted by 756

Member since Sep 2004

14888 posts

Posted on 3/26/15 at 9:08 pm to The Spleen

Yes from a negotiation stand point I would pay it off.

ALways best to make your best deal and not discuss a trade- tell them your are not trading

Make the deal and then ask them what they will give you in trade-- if it is not enough sell car privately

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