Tips on Buying Cars: Advice, ford dealership, fuel efficient car

Question
I purchased a 2003 Ford Ranger via a Ford Dealership about a year and a half ago. The mileage is around 49000. The loan is through a credit union in Chicago. My payments are $356 a month including the extended warranty they talked me into when buying. I am now having trouble making that large payment and want a smaller more fuel efficient car with a lower monthly payment. Can I go back to the dealership and make some kind of trade in switch to another vehicle, or is it all in the hands of the bank? I am new to the car buying world so I have no idea how this works. Thank you!

Answer
Well.. the dealership could probably work with your lender for you... but I think it would serve you best to handle most of it yourself. For instance... you would probably be better off selling the ranger (you will get more than you would for trading it in) - are you upside-down on the ranger? if you owe way more than it's worth - you may have a hard time getting the payment lower even on a cheaper car... - If you sell the ranger.. pay off everything you can on the loan - then buy a cheaper used car.. your credit union could help you with either having both loans - or consolidating the two together (depending what is best for you) - it is possible that the dealership can do all this for you - but more than likely they will give you... ~2000 less than you could get if sold the ranger to a person.. - just something to think about - I would start with talking to your credit union - ask them if they would consolidate your loan if you did buy another car - they can better tell you (based on loan balance, duration, and APR - how much you can spend on the new car) - after talking to them.. you can trade in.. or sell - (your choice) - and if you really don't feel like dealing with any of it - the dealership could do it for you... but more than likely you will get a much better rate/payment/etc.. going through the credit union - Also - buy the cheapest car you feel comfy with.. you are already going to be adding to what you owe for the car - the last thing you need is to owe 5000 more than the car is worth - so buy something cheap to get you by until the loan is caught up or ahead of the vehicles value (incase you ever want to sell it or if something happens and you needed to sell quickly)...

Hope that helps.. if you have any other questions just ask... Thanks.