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Posted in Auto Loans
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DavidMurphy2015

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Trade in and new car
So I have a car that I have negative equity on, I have about 5.6k left but it's only worth about 2k, what's your best advice on getting a new car with a 650 score. I have about 2k to put down, should I put the 2k towards my car payment and try and raise my credit score by lowering my debt or should I put the 2k towards the down payment on the new car, the main goal is to get into a new car so which would raise my chances of getting a car?

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If you are willing to go down a dark path, then you take the car and 2k into the dealership and they will get you financing paying off the older car with the trade in and 2k down.

This is reduculous though.  Why would you want to be many more thousands of dollars underwater????? Remember you buy a new car and you are 20% underwater just driving it off the lot unless you have a large down payment, keep your car and get it paid off before buying new.  The types of things that you are wanting to do is what will lead to some real issues. Imagine getting into a wreck, and insurance totals the car, they give you KBB value and it is now maybe 10k less than you owe.  Now you still have payments and dont have a car, or you have to buy gap coverage insurance and pay more every month.

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I'm in agreement with Nomadre. Unless there is a compelling reason that you must have a new car,  finish paying off the loan on the one you have and keep driving it for a few years. After that and bank the amount you would normally make your payment for.

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