Tips on Buying Cars: Trading in a new car for a different vehicle, car manager, lower monthly payments

Question
I am currently fianancing a 2006 vehicle but my monthly payments are more than what I can handle right now. Is it possible for me to trade in my current car for a different one with lower monthly payments? What kind of penalties would I get? please add anything else you might know.

Thanks,

Kevin Smith

Answer
Hi Kevin and thanks for the question.  While it is simple to ask the answer can be quite complicated.  First you need to talk to your bank or finance company and find out what your "payoff" is.  This is the exact amount you will have to have to clear all debt on your vehicle.  Second you will need to find out what the current Actual Cash Value of your vehicle is.  This can be difficult but you can get a general idea from edmunds.com and you should also talk to the used car manager where you got the vehicle.  If you are going to purchase another vehicle from the dealership you got your current vehicle you will have a better chance of coming out ahead, or at least even.  If you like get all the info above and get back to me and I will see what I can do to help.  Best of luck, Bud