Trading in a car

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XennoX

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Hi folks.

So the situation is this:

> I'm trying to reduce my costs as much as possible, so I am looking at trading my car in for something significantly cheaper in both repayments and insurance premiums.

> My car is currently financed via ABSA Vehicle Finance.

My questions are:

1. Will the bank allow me to trade in this vehicle for another vehicle? I've made 8 repayments into my 60 month term so far.

2. If yes, I'm assuming I can use the float and pump it directly into the finance amount to lower my repayments?
 
You hardly had the car...
lesson 1 folks do research before buying a car.

Secondly maybe ABSA can answer your questions, I'm sure they will be more accurate than asking the drunk IT people on the internet
 
Your bank only cares about the settlement amount, assuming the trade-in value is higher than this you will be fine.
 
Seems I may have missed your point, do you want to keep the same finance agreement and swap the vehicles? This is not possible as the finance agreement is tied to the particular vehicle.
 
8 months? Chances are you'll lose quite a bit but yeah they can't stop you from trading it in for another car.

Did I say chances? You will lose quite a bit.
 
XennoX said:
1. Will the bank allow me to trade in this vehicle for another vehicle? I've made 8 repayments into my 60 month term so far.

2. If yes, I'm assuming I can use the float and pump it directly into the finance amount to lower my repayments?
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Dude you are literally at the worst time to sell. You will lose a lot of money if you sell now. Is it a total disaster that you have no choice but to sell?

What car is it? If it's a popular brand and car you can maybe still swindle a good private deal yourself. If it's not, then rather just keep paying for it.

P.S AFAIK you will have to come to agreement with whoever buys it from you to pay the bank (or to you, and you pay the bank) the amount you owe. The bank then gives the car to you, and from there you can transfer it to the buyers name. You will then have to do a new finance application for the other car.

PPS That is if you do it private. If you trade it in, prepare the Vaseline.
 
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It should be fine, find a cheap car at a dealership that will accept the trade in, the dealer will then settle the your current loan with the bank then you refinance your new cheaper car. This is how I understand it.
 
DMZ said:
Your bank only cares about the settlement amount, assuming the trade-in value is higher than this you will be fine.
Click to expand...

DMZ said:
Seems I may have missed your point, do you want to keep the same finance agreement and swap the vehicles? This is not possible as the finance agreement is tied to the particular vehicle.
Click to expand...

No, your first point hold true ... The dealer will settle the outstanding amount assuming the trade in is higher than the settlement, and recoup this on the resale of the car. The balance of the trade in will be offset against the new vehicle.

Having said that 8 payments on a 5 year deal ........ mmmm.
 
What is the term of your current financing? (60 months per OP) Although not sensible long term, you could consider refinancing to a longer term (72 months) to ease the current burden in terms of the repayments. Just make sure as soon as you can you pay extra each month or the total interest paid over the term will bite you in the ass.
 
DMZ said:
What is the term of your current financing? (60 months per OP) Although not sensible long term, you could consider refinancing to a longer term (72 months) to ease the current burden in terms of the repayments. Just make sure as soon as you can you pay extra each month or the total interest paid over the term will bite you in the ass.
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Maybe also see if theres a balloon payment - those things are killers, but may ease the short term burden on refinancing.
 
TEXTILE GUY said:
Maybe also see if theres a balloon payment - those things are killers, but may ease the short term burden on refinancing.
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A balloon payment isn't going to have that big an impact on a finance agreement that is only 8 months into a five year loan. He's basically going to lose money big time.
 
Ask ABSA for the settlement amount on your car.

Then see if it's possible to sell/trade in your car for that amount (or more, but highly unlikely)
 
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Colin62 said:
A balloon payment isn't going to have that big an impact on a finance agreement that is only 8 months into a five year loan. He's basically going to lose money big time.
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Maybe it is time to bite the bullet and downsize to a MUCH cheaper vehicle. Cash flow sure can be a biatch!
 
To answer the above questions.

1. Car is a 2013 Alfa Romeo Giulietta Quadrifoglio Verde.

2. I can afford the car repayments, plus insurance, plus upkeep without a problem. After all my commitments I'm left with between 37 - 39% of my salary as disposable income.

3. This is a thought experiment to see what my options are. Book value for the car is currently R247k. I'll probably get R200k in trade in. Settlement value is way higher than this at around R300k.

4. I was looking at trading the car in for something like a Polo BlueMotion, Toyota Corolla, Lexus IS250 (<2010), or a Honda Accord. All cars were under R200k.

Essentially what I wanted to do was swop from one car to the next, whilst keeping the current finance conditions. Maybe using the difference in trade in values as a way to ease the capital off.
 
You going to lose a lot either way. Best attempt for trade in is to get a good discount on the new car or try and get settlement as close as you can by buying the new one from the same dealer ... or sell it to FietsaST :)

Crap, cars are bad investments :(
 
XennoX said:
To answer the above questions.

1. Car is a 2013 Alfa Romeo Giulietta Quadrifoglio Verde.

2. I can afford the car repayments, plus insurance, plus upkeep without a problem. After all my commitments I'm left with between 37 - 39% of my salary as disposable income.

3. This is a thought experiment to see what my options are. Book value for the car is currently R247k. I'll probably get R200k in trade in. Settlement value is way higher than this at around R300k.

4. I was looking at trading the car in for something like a Polo BlueMotion, Toyota Corolla, Lexus IS250 (<2010), or a Honda Accord. All cars were under R200k.

Essentially what I wanted to do was swop from one car to the next, whilst keeping the current finance conditions. Maybe using the difference in trade in values as a way to ease the capital off.
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OK well that finally tells us that you are in for the long haul.

A QV Giulietta will go for 50 to 90 behind book if you are lucky ( don't look at what they are selling for, look at what the dealer paid for them). You will be exceptionally lucky to find a VW or Ford dealer to actually fall for your trap and pay you more.
Bottom line is that you will owe 120 to 150 k after trade in, so you cannot dig yourself out of this hole, unfortunately - this is why I stood back from selling Alfas in 2013, as I couldn't bring myself to get someone into a financial situation that he couldn't get out of.
 
Fazda said:
OK well that finally tells us that you are in for the long haul.

A QV Giulietta will go for 50 to 90 behind book if you are lucky ( don't look at what they are selling for, look at what the dealer paid for them). You will be exceptionally lucky to find a VW or Ford dealer to actually fall for your trap and pay you more.
Bottom line is that you will owe 120 to 150 k after trade in, so you cannot dig yourself out of this hole, unfortunately - this is why I stood back from selling Alfas in 2013, as I couldn't bring myself to get someone into a financial situation that he couldn't get out of.
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Retail for my car is R275k. The theoretical trade in valuation is R247k. If we're using your example of R50k to R90k under retail value that means R180k to R220k.
 
XennoX said:
Retail for my car is R275k. The theoretical trade in valuation is R247k. If we're using your example of R50k to R90k under retail value that means R180k to R220k.
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Realistically, that would be about right.

We stopped trading QV's in after sitting with three of them for well over a year - finally sold them at a massive loss for well under 200k.

Don't look at the book and get your hopes up - as I said, you are married to this one.
 
XennoX said:
To answer the above questions.

1. Car is a 2013 Alfa Romeo Giulietta Quadrifoglio Verde.
Click to expand...

Awesome car, but you are screwed. Its like trying to trade in a volvo - only worse/
Look on the bright side, you will enjoy driving it for a long time.
 
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