He wants your payoff amount so he can make sure he doesn't give you a cent more than he feels he needs to. This way he will say they can pay your car off and sell you the new one. It works with some people.
You are under no legal obligation to tell them your payoff amount, and you can always say “I don't know, but you can find out with the lender,” and see what they offer.
"I Have a Trade-In"
For example, they can lowball your trade-in value, and then lower the price of your new car to make it look more attractive. Or, they may show you a higher value for your trade-in and tell you they're being generous, only for you to then notice that the price of your new car went up.
When you trade in a financed vehicle, the dealer might roll the old loan's balance into the loan for your new vehicle, if that amount is greater than the value of the trade-in. You can also use cash from the trade-in to pay off your old loan or simply continue paying your old loan until it's paid off.
Under California law, dealers must pay off your trade-in vehicle within 21 days from purchase. If the dealer fails to do so, you may have a claim against them.
Your credit score won't impact the trade-in value of your car, but it will affect the interest rate you're able to get on the next vehicle you buy. Check your credit score before you begin the process, and if it's in the mid-600s or below, consider taking steps to improve your credit before you continue.
The Red Flags Rule (the Rule), enforced by the Federal Trade Commission (FTC), requires automobile dealers to develop and implement a written identity theft prevention program designed to identify, detect, and respond to warning signs—known as “red flags”—that indicate that a customer or potential customer could be ...
You research the price you should pay before visiting the dealer. Use invoice less holdback less any known incentives. You never negotiate down from MSRP or the dealer's offer. That plays into the dealer's game.
How Much Negative Equity Is Too Much on a Car? The maximum negative equity that can be transferred to your new car is around 125% . It means your loan value should not be more than 125% of your car's actual worth. If it is more than 125% then your next car's loan would not be approved.
Because they need to know what they are going to pay your finance company for your debt. Plus they finance the remaining balance on your loan for the trade in on your new loan assuming you owe more than the trade in value of the vehicle your trading in.
One way to get out of a car loan is to sell the vehicle privately. If you're not upside down on the loan, meaning the car is more valuable than what you currently owe on it, you can use the proceeds of the sale to pay off the current loan in full. Another term for an upside-down car loan is negative equity.
When Not to Trade In a Car. Although there are exceptions to this rule — as there are for most rules — don't trade in a car that is worth less than what you owe. In other words, if you get less when trading it in than the loan payoff, don't do it.
The profit from trade-ins comes from the difference between the trade-in value given to the customer and the resale value of the vehicle. Financing and insurance products are a significant source of income for dealerships.
If an experienced appraiser thinks you're trying to hide something, they'll either refuse your trade or give you a low-ball offer. There are several things that the dealership's used-car appraisers will be looking at: Vehicle Age: The worth of a vehicle generally declines with its age.
Unfortunately, it isn't an exact science because it changes from car to car and dealer to dealer. However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb.
They generally earn through commission rates which depending on the dealership company, can range between 20% to 40%. So how much money do car salesmen make per car? If you sell about 10 cars in a month and on average you make about $40k per year, you will be earning $330 per car. But, that's just a rough estimate.
So, if you can truthfully allege that the dealer lied to you about the condition or history of the vehicle, then that is fraud, and you can take him to court. You were induced to buy the car based on the car dealers misrepresentation about the car.
Dealers want to make a profit on the vehicle, so you may not get the car for the invoice price that the dealership paid. The Federal Trade Commission suggests trying to negotiate a 10% to 20% discount off of the mark-up (the difference between the MSRP and the dealer's cost), based on the car's demand.
Cars are usually detailed and then the obvious damage or repairs attended to. Oil and filter changes are common. The shadier places won't use the better synthetic oils even if they are recommended by the manufacturer. They may also add an extra heavy oil to mask engine…
For example, if you owe $10,000 on a car worth $15,000, you could apply the $5,000 credit toward purchasing your new car. Your car is worth less than what you owe: If your car has negative equity, you'll need to cover the difference with a down payment or roll the existing balance into a new auto loan.
On average, a new car buyer with an excellent credit score can secure an average interest rate of 5.25%, but that average jumps to 15.77% for borrowers with poor credit scores. For used car buyers, those averages range from 7.13% to 21.55%, depending on the borrower's credit history.
If you don't have a loan on the car, the best time to trade it in is often before its factory warranties expire, typically at 36,000 miles or three years for new vehicle warranties and 60,000 or five years for powertrain warranties.