Question : would paying off my cars negative equity then trading it in be a smart idea?
i currently owe 14,000 on a car that’s only worth 7,000 trade in value, a 2007 chevy impala im very upside down in. i want to get out of it and into another vehicle and letting go of the car is not an option because i don’t want to kill my credit.i know trading it now the negative equity would just be added onto my new payment would it be a good idea to pay the cars negative equity down then trade it in?
equity trading

Best answer:

Answer by Buy the Numbers
Don’t take this the wrong way, but if you owe that much, then you probably got ripped off by the dealer – which will likely happen again. Also, I very much doubt that an ’07 Impala is worth only $ 7k (Blue-Book numbers are created by a dealer organization, so trade-ins are very low and sale prices are exceptioanlly high), unless it has VERY high mileage, so it looks like you are already on the path to get ripped off again. Please consider keeping the car.

Value for lowest model Impala:

http://www.edmunds.com/used/2007/chevrolet/impala/100757492/options.html

On the more general question of paying cars off and trading them vs. rolling the loan, it depends on whether the new interest rate (on the new car) is lower or higher than the old one (on the Impala). Only the remaining PRINCIPAL should get rolled over. So if you have 14 payments of $ 1000, then your total remaining payments is $ 14k, but your remaining principal is significantly less, perhaps $ 10k. The rest ($ 4000) is interest, which should NOT get rolled over. Instead, the $ 10k would get rolled and charged at the the new interest rate. It is soooo easy for unscrupulous dealers to confuse people and rip them off….

edit: Doctor Deth, if you were offered less than KBB trade-in, then perhaps you were low-balled as well. Did you try to sell your car privately first? How many dealers did you check with?