So many people think that since the Accord is $27,000, and they
are getting $10,000 for their Camry, that they would only need to
finance $17,000 on their new Accord. However, the Camry has a
balance owed on it of $8,000, so the balance must be added to the
new loan.
Lots of people write to me thinking the dealer is trying to scam
them. They think that if the balance owed is being added back that,
in this example, they are only getting $2,000 for their Camry.
It’s no scam. Your trade has to be paid off. You may only get
$2,000 credited to your new car purchase, but you get $8,000 paid on
a loan that you owe.
The dealer is giving you $10,000 for the Camry. If they also paid off the
$8,000 loan that would come to $18,000. Do you really think a 2000
Camry is worth $18,000.
Remember, your old loan has to be paid off. The dealer is not out
to scam you on this one. It’s a legitimate practice.
