subject: How to refinance your negative equity on your next vehicle [print this page] How to refinance your negative equity on your next vehicle
Imagine you are driving a 2005 Honda Civic; you bought it since new from your local Honda dealership. The vehicle may have 100,000 km on it and it is worth $5000 when you are trying to trade it back to your Honda dealership. What if you financed the vehicle before and you still have over $8000 outstanding car loan with Honda Canada Financial Services. 8000 - 5000 = 3000, that $3000 is what we call "negative equity" on your vehicle. In another word your outstanding car loan (which will include interest and remaining payments) will always be higher than your trade in value. For you to get out of that vehicle and get into a new one, you will need to come up with $3000 plus HST to break even. But what if you don't have any extra cash on your hand to clear up this mess; can you refinance the $3000 into your next vehicle? Well it is illegal for some one to refinance the money they owe to someone else, but there are many creative ways you can get out of that sticky situation.
For one, a dealership may use their profit to cover up some of the negative equity. For example if you are buying a brand new Honda Civic, the dealership usually makes anywhere between 1200 to 1500 in profit. Now imagine if they offered you 1000 in discount, instead of receiving that 1000 as your discount, you can ask your dealership to pay back your negative equity, therefore reducing to total amount to $2000 plus taxes. But for you to hide your negative equity entirely, you need to find a bad credit car loan provider. Because bad credit car loans usually can offer you a lot of flexibility you maybe able to transfer the entire amount on to your next vehicle. The only catch is a higher interest charge.
So the next time you are caught in a situation similar to this one, use your common sense. Is it worth your while to apply to a bad credit loan provider just to get rid of your negative equity and get into another vehicle? Or would you like to continue to pay for your car loan until you actually have equity in the vehicle. Thank you for reading this article it is brought to you by No Credit Check Car Loans Toronto, and you can find us online for more information at http://www.nocreditcheckcarloans.ca or http://www.soscarloans.com
