For many car owners, their old car is of great importance to them. Of course, they also want to get something out of it financially when looking for a new car. You can, therefore, use an old car as payment for the new one you buy. The Artful Dodger shows you how to do this easily and quickly.
Use your old car as a payout
Many motorists pay great attention to the size of their payout when buying a new car. When you buy a new car you are often asked to make a payment. However, not all lenders make this claim. Payout is a security that you, for example. Ask your lender or dealer where you choose to buy your new car. The security shows that you have room in your finances and that you can, therefore, pay with full guarantee the full amount that the car costs.
Some car dealers offer to buy your old car for a set amount, for example. USD 20,000, if you buy your new car from them for example. at least USD 80,000 or any other stipulated amount. The size of the payout is determined by many dealers to either be a certain percentage of the new car’s price, e.g. 20% or a minimum amount of e.g. 20,000 USD.
The minimum amount acts as a form of backup and security for the car dealer so that he/she gets a reasonable amount paid out immediately. If you buy a new car whose sales price is so low that 20% of the price is less than USD 20,000, the payment will end at USD 20,000. cost USD 95,000, and then the size of the payment would end up at USD 20,000. If you then want to use an old car as payment for the new one, and if your old car can be sold for USD 15,000, then you only have to with 5,000.
Old car as a payout – afford the new one
If you owe USD 100,000 in your old car but would like to buy a new car for USD 130,000, your bank will probably more than want to help you increase those loans. You will then owe USD 130,000 instead of only 100,000. However, there are usually additional fees such as registration on top of the loan, even though the size of the loan is really just growing. There may be different approaches depending on whether you have borrowed the money from your bank or through a finance company.
If you owe USD 100,000 for your car financing but have a car that you can sell for a value of USD 120,000, then you have USD 20,000 in profit. Whether your new car is brand new or used is of no consequence to this trade. However, this is another way to use an old car as a payout for your new one. By selling your old car for USD 120,000, you both have all the money to pay off the loan and you also have money to pay for your new car.
In fact, you can easily and quickly use the price of your old car as a payment for the new car you plan to buy. However, if you owe money in the car that you are trying, always remember to deposit these so that you do not pay for a car that you no longer own.
Your old car’s maturity
In relation to the maturity of your car loan, you should always consider carefully the size of it. With the right maturity, you only pay for your loan during the period in which you have the car. Therefore, if you know in advance that you always change your car to a new one after 5 years, then you should, as a rule of thumb, set your maturity to 5 years. If, on the other hand, you are the type who keeps your car for many years, then you should still have a short run if you notice many miles in it every year.
You can say, as a rule of thumb, that the longer you drive in your car a year, the shorter your maturity should be. From the moment you drive out of your dealership’s garage and own your car, its value drops. This is whether you drive it or have it standing in the carport or garage during the winter months or not. However, common use, such as driving to and from work, also wears off on your car, and your car’s value then decreases.
Let’s look at a small example: If you drive between 10,000 USD and 20,000 USD each year, the running time can for example. be 6-8 years. If you drive much more (eg over 50,000 USD per year), your running time should be lower, e.g. about 3-5 years. However, The Artful Dodger recommends that you always evaluate the length of your life based on your own personal consumption of the car.