Question: Can you please help me break down how much I'm really paying for my car after my trade-in / payoff is figured in.

November 11, 2005

Hi Tony

I desperately need help trying to figure out how much I will actually be financing / paying for my car after my trade-in. I've confused myself beyond all recognition.

Here are the figures...theoretically:

The price of the car is $19,500 (not including 6% sales tax). I owe $6000 on my current car, and they will give me $5800 on the trade-in. I will also get a $500.00 "loyalty" coupon towards the purchase price. I'm only putting down $100.00.

How much will I have to write out the check for (I have my own financing). Every time I tried to follow the "formula" for figuring this out, I just got more confused.

HELP - THANK YOU SO MUCH.

Sincerely,

Claudia

Answer:

Hi Claudia,

It's very easy to get confused over all these numbers. It happens to a lot of people, so don't worry.

OK...let's see...

Take the $19,500 or whatever the sale price is and...add sales tax (Whatever that comes out to. I can't calculate that for you because each state and county vary in what exactly is and is not taxed.)

Now, add title, documentation and registration fees charged by the dealer. (These may or may not be taxable)....

Add the selling price, title, documentation, registration fees and sales tax and come up with the "out-the-door-total."

Take the above total and subtract the trade-in allowance, then add the pay-off back in.

Subtract the loyalty rebate of $500, and subtract the cash down and this leaves you with the net amount due.

Claudia, the dealer should have it all broken down for you on a sales order, and they should have given you a copy when you agreed to buy the car. Get that and then just check everything for accuracy. If there's something on there that you don't understand ask them to clarify it for you.

All my very best...

Tony Iorio