[lyndon_h]

Question:
I'm looking to get rid of the S2000, shortly. It has been a great car and i hate to give it up, but my wife is expecting. I'm thinking that it would be best to get rid of the S2000 during the spring time (summers in Texas are too hot for convertibles). My resale will probably be best during this time of year.

The problem is that I owe about 6 payments on my car. What would be the best way to approach this situation? If i decide to trade my car in, will the dealership make the commitment to pay my existing loan off before running my credit for the 335? I'm not sure that I'm going to be approved for another car loan when i already have one active.

There is the option of pulling 3,500 out of my savings to pay off the S2000 loan, then ponying up to pay the OTD price (~$3.5k) for the 335 lease. But I dont feel comfortable about pulling $7k out of the bank in day.


What is the best method for purchasing a car when you owe money on your current car? The simple thing to do would be to wait it out and pay off my car, but I'd like to capitalize on the "convertible spring fever".

thanks

[John 070]

Summary: Pay off your loan with savings and get a blank check to have the best buying power at BMW.

I'm not an expert, so take what I say with a grain of salt. Also, I have bought 2 new cars, the BMW being my 2nd, but I have never traded-in a car.

I think the fact that you owe on the S2000 is not material. The S2000 is worth way more than 3,500, so in essence, you have equity in the Honda. Also, the new bank, when they evaluate your loan, it's not that you have 2 car loans, it's the fact that you owe 3,500 that they consider.

Again, my advice because I did this with the 335, is to apply for one of those blank check loans. This way, you have cash buying power at the BMW dealer. BUT, then you apply at a credit union, who will have a lower rate. You tell the BMW dealer that you DO NOT need financing, you're going through your credit union. In the end, the dealer will beat your credit union by .25% to get the business.

Good luck!

[lyndon_h]

Thanks for your reply, John. I really appreciate it. This will be my first time purchasing a car while owing on another.

I will be leasing the 335 e90 (3yr 15k), so the total amount of the lease will be within 5k of the S2000's resale. Now i need to figure out if i'm going to sell the S2k privately or trade it in. I'm partial to the thought of selling it privately, but i dont want to deal with the hassle. I think i'll get a value estimate from the stealership first. I have a feeling that they are going to try to short me a couple of thousand for the trade in. We'll see in a week or so....

[LEDZEP]

I agree with most of what John 070 said. Don't worry about the balance of your existing loan - most banks assume you are getting rid of one car to buy another - that is the norm. Also, your credit score and credit history are by far the important considerations.

I also agree about the strategy of the blank check financing. I've done that on my last two purchases and it is an easy process. Where I disagree is that the dealer will necessarily be able to beat the rate. In both cases, I was able to get a rate about one full percent lower buy shopping around and arranging my own financing. Dealers deal with only a few lenders, and these lenders are not always going to have the best rates, even through the dealership.

It is worth asking though - a simple call to the finance manager at your dealership should be enough. Be honest about your credit score and history, and they should be able to quote you a rate without an application. Mine did both times.

Best of luck on the purchase!!

[lyndon_h]

Thanks LedZep. I'll give the finance manager and see what they can come up with. I financed the s2000 through a bank using Lending Tree. It was a pretty good experience. I might go that route again.

thanks

[IrvRobinson]

I was unclear from your post if your planning on getting a 335 cnvt,but if you are,is it on order already ? The ED department ran out of their allocated cars for May/June pickup,so people are doing July and later.The dealers don't get their May allocations untill the end of March,but most probably have wait lists going.The 328 cnvt will be much easier to get !

[lyndon_h]

Originally Posted by IrvRobinson

I was unclear from your post if your planning on getting a 335 cnvt,but if you are,is it on order already ? The ED department ran out of their allocated cars for May/June pickup,so people are doing July and later.The dealers don't get their May allocations untill the end of March,but most probably have wait lists going.The 328 cnvt will be much easier to get !

Thanks for the reply, Irv. I'm not sure what the term "cnvt" means, though. I'm looking to lease a 335 very shortly. I've flirted with the thought of going an ED, but i dont think i'll be able to do it because my wife is too far along and wont be able to fly in late July. I hope this answers your question