Swapping newer car for older car - finance involved!

[t0m]

Hi guys, been mulling something over in my head recently regarding a swap at the dealers. I have a 57 plate Dynamique SX 1.2 TCE worth I estimate about 8k. On the forecourt at the same place I bought it from is a 225 Megane in brilliant nick at £8995. Now assume for a moment they are evenly priced, as you wouldn't pay full whack for it anyway.

My 57 plate is on Renault Finance, would they allow a swap? I'd assume they'd buy mine off me at a low price and whack it up for around £9995 as theres a similar one on an 08 for £10595. Technically they're making money although after fees and whatever I suspect the margin is tight.

The question is, do they have rules against trading down (in age only - obviously in car it's an upgrade!) fron brand new to second hand. The values will be relatively close all in all!

If anyone could advise I'd appreciate it!

 

[Daniel]

There are no rules. You can trade/finance whatever you want. (within reason)

But what you want to do is perfectly fine. You need to look at your settlement figure on the current agreement, as if its £12k for example, you will be financing a LOT of money for this new car.

 

[t0m]

I'm confused, If I owe say £8k, and my car is worth £8k then giving it back to them and starting on another makes no nevermind as such, right?

These are not factual figures just examples, but I guess the figure that concerned me most would be the difference between what I owe and what my car sells back to them for which is almost certainly going to be less. Even if I start say -£2k then financing that on top of the £8995 the Megane is up for is still less than what I paid for my Clio now?

 

[SoA2k6]

If you think they're going to buy that car off you for 8, you can jog on. I just bought a 57 plate 197 for £9995 from Renault. They'll give you between 4 and 5K if you're lucky.

Your best bet is to actually go in and speak to them

Remember, you've got your interest on top of the 8K too. So I'm guessing you;re paying close to 10K? If you've paid £1000 off that, you owe £9000, you get a trade-in value of £5500, meaning you still owe £3500. Lop that on top of the 225 plus the interest and you're near 15K.

Maybe those figures aren't even close but you're definitely missing something.

 

[Ben^]

Doesnt matter what your car is worth, its what you owe. You will more than likley be in negative equity which means you will need to finance some of the old car and add it to your agreement.

If you owe 8 and its worth 8 then you can break even and just get a new finance agreement on the Meg.

I would go get your car valued against the meg, bare in mind very few dealers will give any discount on screen price if you are part ex'ing as they write some of the discount into your car valuation eg. they do offer 8 for ur old car, that might be 7k with 1k discount etc Get them to get a settlement figure and get them to do some figures for you.

 

[Chesh]

Why would you even buy a 1.2 tce in the first place lol

But i am in agreement with soA2k6

 

[Crazychick]

I had a similar problem when I had a wrx on finance. Was also told that in most cases now they would only allow you 2.5k on top of the original deal and they offered me 4k for my wrx and I still owed 7. so I couldnt do it unless I came up with 3k

 

[t0m]

Ok, I'm assuming I'm in negative equity. That's obvious.

I sell car to dealer for 7k
I owe 9k
Me = -£2k
Megane is 9k
9 + 2k = 11k
Clio currently financed at £12k
Me = +£1k

Basically even with a deficit surely I'll be saving money or at least breaking even because the megane is nearly 5k cheaper than what I paid for the Clio!? Plus the fact the Clio is going to be a damn site easier to sell than the Megane for them.

Am I way off the mark? It doesn't really matter if the figures aren't correct, it's the theory I'm wanting to know if I'm right on.

 

[Crazychick]

Have the dealership given you a quote for what they will give you. I was getting offered 2.5k under what I could sell mine for private on the wrx.

Have you got a settlement figure and remember some companies penalise you for early cancellation. You have to read the small print loads.

ie is that 9k you owe including all the interest and payment protection etc.

 

[Jasey]

I owe 9k
Clio currently financed at £12k

sounds like you Owe £12k not 9k.

Get yourself down to the dealer with your finance agreement and get him to do the maths

 

[t0m]

I've got no idea, I'm trying to work out the basic principals as regardless of the figures if it's not allowed what I'm proposing then it doesn't matter how much I owe does it.

It's all speculation at the moment I've emailed my contact at the dealer so we'll see.

 

[Jasey]

Basic principle is the dealer will make money on both the car you trade in and the car you buy from him. The finance company will also make money from the transaction.

The Question is how greedy is he and how much do you want to change

 

[mcphee197]

You are going to be muchos negetive equity on your current car.

Negetive equity is the financial version of love handles. The fat has to go somewhere and it will go right on the hips of the megane. Suddenly the 8k megane becomes an expensive car for its age / condition / milage etc etc

 

[182kev]

Ring your finance company and ask for a settlement figure.

 

[Brett]

Finance on cars is rubbish. Unless you intend on seeing out the length of the deal it becomes a way to get in to large amounts of debt quickly.

 

[Daniel]

Finance on cars is rubbish. Unless you intend on seeing out the length of the deal it becomes a way to get in to large amounts of debt quickly.

Thats the thing. Unless you put down a hefty (50%!) deposit on your finance, the only way it will work for you is if you keep the car for the full term of the agreement.

People that put down £1000 on a £9000 car then try and change it after 12 months only end up putting themselves deeper in the s**t.

 

[SoA2k6]

You're forgetting the interest on top of the Megane.

 

[t0m]

I've spoken to them and my settlement figure (what I owe) is significantly less than what I thought, and I've got an "in principal" valuation on my car which makes it all possible for about +£30 per month than what I'm paying now.

Plus, it will be a 4yr deal with no balloon payment so after 4 years it's totally mine with no extra payments. Couldn't believe my own settlement figure when he told me!

 

[Ben182]

how old is the megane? are you going to be happy to be still driving it in 4 years time?

you say it's only £30pm more than now, but how much longer do you need to pay for? i.e. have you got 4yrs left on your clio?

 

[pugs9000]

Remember if you go ahead you will need to clear any neg equity in order to get the deal on the meg.

 

[Daniel]

Remember if you go ahead you will need to clear any neg equity in order to get the deal on the meg.

No you don't.

 

[Dean0o0o.]

Remember if you go ahead you will need to clear any neg equity in order to get the deal on the meg.

No you don't.

Yes and no, the finance company will clear the negative equity so you personally wont have to clear it... then that will be bundled into your figure for the megane

 

[Daniel]

Remember if you go ahead you will need to clear any neg equity in order to get the deal on the meg.

Yes and no, the finance company will clear the negative equity so you personally wont have to clear it... then that will be bundled into your figure for the megane

The customer doesn't need to clear it.

 

[pugs9000]

Most finance companies, well the responsible ones won't deal or be reluctant unless you pay the difference between what you owe and what the cars worth, some companies will but imo aren't worth touching, so a deposit in other words. I would also pay it rather then let the amount keep building, remember the neg equity will keep increasing if you don't!

 

[Dean0o0o.]

The customer doesn't need to clear it.

all in all... all neg equity needs to be cleared... but not by you

 

[mcphee197]

I've spoken to them and my settlement figure (what I owe) is significantly less than what I thought, and I've got an "in principal" valuation on my car which makes it all possible for about +£30 per month than what I'm paying now.

Plus, it will be a 4yr deal with no balloon payment so after 4 years it's totally mine with no extra payments. Couldn't believe my own settlement figure when he told me!

But you will want something else mid way through the 4 years and you will be in further negetive equity when you make that purchase.

Your choice mate, its your money. Work out what is best for you. Just don't do what that tool did recently and buy a clio thats worth 2k and get finance to the tune of 10k

 

[t0m]

I appreciate what you're saying mate but I've done this once before but the car I was going from was brand new and I was going to another brand new car, albeit more expensive, there was negative equity involved and I was young and impatient and owed a silly amount for what I was getting.

I've waited a while and taken on increased payments to get me to a better stage now, the only reason I started the thread was I wondered if the deals were doable from brand new -> used as like I was told today by the dealers, "it's a completely different proposition", but I'm scheduled in for Saturday at 3pm for a drive and a discussion. The payments are very close to my current ones without any bartering or haggling so the signs are good. I'm excited but not holding out too much hope.

The insurance quotes were quietly surprising in a good way, so things seem to be looking up! Thanks for all the advice guys, I'm going to try for a set of mates, 12 months tax and a full tank of fuel with it so we'll see how it goes on Saturday.

 

[Brett]

I appreciate what you're saying mate but I've done this once before but the car I was going from was brand new and I was going to another brand new car, albeit more expensive, there was negative equity involved and I was young and impatient and owed a silly amount for what I was getting.

I've waited a while and taken on increased payments to get me to a better stage now, the only reason I started the thread was I wondered if the deals were doable from brand new -> used as like I was told today by the dealers, "it's a completely different proposition", but I'm scheduled in for Saturday at 3pm for a drive and a discussion. The payments are very close to my current ones without any bartering or haggling so the signs are good. I'm excited but not holding out too much hope.

The insurance quotes were quietly surprising in a good way, so things seem to be looking up! Thanks for all the advice guys, I'm going to try for a set of mates, 12 months tax and a full tank of fuel with it so we'll see how it goes on Saturday.

I don't think Renault will provide this mate

 

[Dean0o0o.]

im doing kinda same thing for a 200... using th equity from my current car in the deposit for my 200...

good luck mate, hope it all works out

 

[Ben182]

The payments are very close to my current ones

yes, but do you have 4 years of payments left on your current ones?

 

[shadowsun]

Best go in and see them mate, you won't know until you ask.