Automotive

Trading in car to lower payments?

  • Last Updated:
  • Jan 28th, 2020 7:15 pm
[OP]
Newbie
Aug 22, 2017
65 posts
35 upvotes

Trading in car to lower payments?

Hi
*Flame suit on*
I bought a car that I shouldn't have.. monthly payments are taking a toll. I can afford it but saving money is tough...

I am paying $900 monthly. Finance loan.

Car is probably worth 45,000
Loan has 52,000 remaining.


What would you guys do in my situation. Please avoid lecturing.. I know I made a mistake..just trying to fix now.

Car is 2015 BMW M3
50 replies
Sr. Member
Oct 2, 2017
701 posts
488 upvotes
You can try, but the difference in loss of value will get rolled into your new "low payment" loan and you'll end up paying more for it in the end (mostly interest). Basically you won't really save any money in the end anyway.

Imo paying it off and then selling the remaining value will be your best option in the long run if you can still afford the payments

(I also don't understand why people choose balloon payment in the end but what do I know)
I'll see you at the top, cause the bottom is too crowded
Deal Expert
User avatar
Jul 30, 2007
27551 posts
12599 upvotes
Toronto
7 yrs loan to begin with it sounds like at probably 5.9% interest (if financed thru bmwfs)

your only option is to sell the car privately and then pay off with loan with proceeds + dip more $ into your bank account of say up to $8K to pay it off completely.

Once you are in the clear of the above and you need another car, then lease a cheap car with low interest rate. Drive it for 3-4 yrs and at the same time, you can try to replenish your bank account and out of this mess.
Deal Expert
Aug 22, 2011
33918 posts
19763 upvotes
Ottawa
Sell it at a loss and pay the balance.
Deal Addict
Mar 17, 2016
1307 posts
1103 upvotes
azmongold wrote: You can try, but the difference in loss of value will get rolled into your new "low payment" loan and you'll end up paying more for it in the end (mostly interest). Basically you won't really save any money in the end anyway.

Imo paying it off and then selling the remaining value will be your best option in the long run if you can still afford the payments

(I also don't understand why people choose balloon payment in the end but what do I know)
I'd go with this. Enjoy the car (it's a great car), pay it off and then sell it privately. M3s generally hold their value well, so you should be able to get a good chunk of money back. Take care of the car and don't mod it to hell.
Deal Expert
Aug 22, 2011
33918 posts
19763 upvotes
Ottawa
azmongold wrote: You can try, but the difference in loss of value will get rolled into your new "low payment" loan and you'll end up paying more for it in the end (mostly interest). Basically you won't really save any money in the end anyway.

Imo paying it off and then selling the remaining value will be your best option in the long run if you can still afford the payments

(I also don't understand why people choose balloon payment in the end but what do I know)
10yr loan plus balloon payments for lower monthly payments...aka budget balling.
Deal Addict
Oct 14, 2015
1115 posts
1107 upvotes
Toronto, ON
Yes sell it at a loss and buy something cheap with a V6 engine for like 10-15K.
Koodo $40 10GB!
Deal Guru
User avatar
Oct 6, 2010
13938 posts
8358 upvotes
Toronto
Wow, I didn't realise that a 5 year old M3 was over $50,000.

Sell it an buy manual mirage for like $10k. Otherwise, like mentioned, if you can afford it, which you say is possible, hold on to it and dump it later.
DYI difficulty scale:
0-joke
10-no joke

¯\_(ツ)_/¯
Deal Expert
User avatar
Jul 30, 2007
27551 posts
12599 upvotes
Toronto
^ that's the very optimistic view of getting $50K unless it's extreme low mileage, fully loaded and manual

If OP sells it back to dealer (cash or trade in), OP would not get more than $40K, hence even a bigger potential loss
Deal Guru
User avatar
Mar 9, 2007
13364 posts
8338 upvotes
Think of the Childre…
A Beige Corolla preferably.
Lolvtec wrote: Trade it in for a Corolla

WOULD SOMEBODY THINK OF THE CHILDREN!!!
Deal Fanatic
Sep 10, 2008
6473 posts
4484 upvotes
Kitchener
Lolvtec wrote: Trade it in for a Corolla
Stupid, nobody goes from an M3 to a Corolla.
A Tesla Model 3 would lower his payments, reduce his driving costs by 80% (fuel, maintenance & insurance) and would still retain all the performance of an M3.
Deal Addict
Jan 8, 2007
2619 posts
1128 upvotes
Calgary
azmongold wrote: (I also don't understand why people choose balloon payment in the end but what do I know)
If you can get very low interest rate (sometimes 0%) and then on top of that choose balloon payment, you lower your monthly payment and defer that lump sum payment out into the future. That sum is worth more now than it is 5 years down the road so why not? Now you can take that sum that you deferred and make it go to work for you elsewhere, same with lower monthly payments.

Obviously that's not what is happening here, but this is why some people do it.

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