Raambzy

Hey guys - I am currently looking to get out of my old vehicle and purchase a used 2015 Ecoboost Premium... please excuse the excessive amount of details but I'd like to paint a clear picture of the situation I am in. My car buying experience is limited so any help is really appreciated.


So, I am currently upside down on the car I own. I currently owe $14,249.69 on my car and it is worth 8500. The difference is roughly $5500 and the car I am looking to buy is priced at $19,750.
I am looking to put $3500 down and are giving a "trade in allowance" of $14,000.
There is also a "service contract fee" of $3,390.
The TOTAL (including my trade in) is $20,683.21 with an interest rate 7.9%.



This all seems too good to be true...
It is also worth mentioning that this is one of those "stay away from" independent small car lots.
They provided an AutoCheck on the car and it seems to check out. No crashes or anything or sort reported. Also, just one owner.
I am getting the car inspected at Ford dealership Saturday and if everything checks out, I'd like to pull the trigger...



Is this small car trying to get one over on me, or am I really just getting a "steal" considering my situation (being upside down on my car $5500)?


EDIT: Forgot to mention... I called them up and asked why they were valuing my car so high. They said that "Banks do not like to see negative equity" and that is the reason for a high appraisal.

lifanus

They'll likely go with the trade in value of the car ($8500), and then put the rest of the price difference ($5749.69) on top of your new loan for the ecoboost premium. They will never ever pay off your up-side-down value on your loan, it rolls over to your new loan.

So if they are asking $19750, total price of your new ecoboost will likely be $19750+$5749.69, which comes to $25499.69.

Since you are putting $3500 down payment, that brings the total loan amount (that bank will finance) to: $21999.69

Dealer fee is around $500-700 around Miami, plus tags and tax. So roughly $3000 extra that will be put into the loan.

So your total out of the door price for the car will likely be $28499.69 ($24999.69 financed + $3500 down payment)

paul_g

I realize this is an older post but none of it looks good.

1.) You are upside down in a car --> Not a good place to be financially. What is the reason for getting out of this vehicle? If it's mechanicals, those can always be fixed. If car looks old and faded, and good detalair (who does paint correction) can make the car look as good if not better than new inside and out.

2.) $19700 for a 15 EB Mustang Prem sounds high. Should probably be around the $15K-$17K range. So they've got about $4-$5k profit built into the price tag.

3.) They provided an AutoCheck?? Those don't always mean anything. Have a good mechanic look over the car before you make a deal.

4.) 7% financing is awful ---> another financial warning sign. It's bad for you and great for them. Dealers make money on the financing too... They are making money on the bank financing with a kick back on every percent from the bank. So profit on the mustang is built in there as well.

Now lets talk Actual Cash Value vs. Trade Allowance. It's not for the BS reason they gave you. It's because they want to off-load the EB Mustang so bad, that your car looks like a better deal for them. RW drive 4 cylinder mustang with a cash value of roughly $14-$16, who knows what they bought it for... maybe even less.

What they're doing is pushing the value of the mustang as high as it can go... So they're making $4 to $5k on that (at the price tag), and then increasing the value of the trade, (allowance) on the books, thus reducing the profit on the Mustang because they want out if it and feel your car can flip for a better profit.

Read all about ACV and Allowances here:
http://www.motortrend.com/news/car-s...for-you-23275/

One more thing to consider on this cream-puff Mustang (from Texas) is where was it during the hurricane? Where was the vehicle you currently have during the hurricane? If your current car was safe and sound and sustained no damage, then your odds are better for keeping your current vehicle.

Like lifanus states above, you will be more upside down on this Mustang than if you just pay-off your current vehicle and eventually buy a brand new Mustang.

cbdallas

In regard to AutoCheck, CarFax, etc. Consider these 'reporting' entities to be next to useless. My sister bought a certified-pre-owned Acura TL that was only 2 years old. Looked great, had brand new tires on it, and showed a complete service history at that very same Acura dealership. The problems didn't rear their ugly heads until she took it on her first road trip. Excessive tramlining and wind noise. An independent mechanic, also a friend of hers, put it on a rack and found what appeared to be replaced front suspension components and subframe. It was also way out of alignment. I also found very rough paint on the rear bumper, as if it had been painted but was missed during the clear-coat step. Judging from apparent damage to the front and rear of this car, it had been driven to hell and back, all with a clean CarFax.

Keep in mind: If an accident isn't submitted as an insurance claim, it won't be reported to AutoCheck / Carfax.

Farmer Fran

7.9% is insanely high.