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Question: I want to trade my Honda Civic for a larger car. The problem is I owe a lot more on it than it's worth, and it sustained $3,000 in body damage while parked at the train station. Any ideas on how to proceed?

Hi Tony,

Great Site! So glad I found it!

So here's my question:

I purchased a CIVIC EX Coupe last year and I am now looking to trade it in because my wife is expecting a baby in November. The CIVIC coupe is simply not roomy enough.

Here is my dilemma; The payoff on this vehicle is about 18K. The vehicle I want is about 25K. I was thinking about dumping 4K on the Civic to bring the payoff to about 14K.

To complicate matters someone hit my Civic while parked at the train station, causing about 3K of damage. How do I take this mess and turn it into a new car roomy enough for a family? Do you think it is wise to trade it in as is, or should I repair it before doing anything else?

Thanks in advance.

Michael T.


Hi Michael,

Thank you Michael for your kind comments about my website. They are very much appreciated.

First of all you can trade the car as-is . . . if you can find a dealer who is willing to take it wrecked, but you will surely have to give them the check from the insurance company in order to balance out the trade allowance. You can also get it repaired by a professional and reputable repair facility first and then trade it without the complication of trading it wrecked.

Either way you are going to lose a ton of money by virtue of the fact that your payoff is undoubtedly much higher than the car is worth on trade. The dealer is only going to give you wholesale value for your trade no matter how they make it look on paper . . . . or what they tell you. They have to resell it for a profit so don't believe for a minute that they will give you top retail value for it.

In order to cut your losses as much as possible you should consider selling the car privately. You could advertise it locally, on eBay or on some national classified sites. Also read the following article "How to Sell Your Car for the Highest Possible Price!"

Once properly repaired the Honda Civic is a very popular car, so there should be no shortage of potential buyers. You will have to get as much as you can then come up with the balance of the payoff so you can provide your buyer with a clear title. Believe me, you'll come out a whole lot better doing it this way than just trading it to a dealer.

Also Michael, examine your loan contract for any add-ons such as extended warranty, credit life insurance, disability insurance or GAP insurance. If you have any of these coverage's on the loan you can cancel them and reduce your payoff accordingly. This could amount to a substantial amount if you do indeed have any of these items on the loan.

You will have to apply for the refunds through the car dealer who handled the financing for you . . . and they like to drag it out because it amounts to a charge-back for them, but it can make a difference on your payoff. Every penny helps when you are "upside-down" on your car loan.

Good luck . . .

All my very best . . .

Tony Iorio

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