Tell Me If This Deal Sounds Cool or Not!

[SamirD]

Really bad financial decision to roll the ten grand left on the Kizashi into the Evo loan. Dealers offer this because people are financially reckless enough to do it. If you are reckless enough to do it, get gap insurance because you'll lose your shirt if you totaled the Evo anytime soon after getting it. Never finance a depreciating asset if you can avoid it much less finance two depreciating assets as one especially if you don't even possess one of them. Just my two cents.

Very cool insight! What's the numbers behind this? I want to know the insides of this since I'm not familiar with dealer financing tricks.

[sx4rocious]

One of the first things to note, is that if you finance through the dealership, it is completely legal for them to "add" intrest points to the loan without telling you. I'm pretty sure the number of points varies between states. Here in Indiana, it's 2 points, so if you ACTUALLY qualify for 3.5% APR, then the paperwork you get says 5.5%. This can add up to THOUSANDS over the life of a 6 year loan when you're already talking about 35K or better. This is how dealerships continue to make money while giving you a "below invoice deal of a lifetime!!!"

The next thing to note is that dealerships are VERY good at making the paperwork look one way while actually meaning another. The dealer may only need to get $30K out of the Evo you're looking at to make money, however they price it at $40K to cover the amount they will have to "eat" on your trade in. So if you did the deal, they tell you they are giving you $10k for a trade-in while you owe $20k. Take $10K off the $40K starting price=$30 so they still make what they need from the Evo, then tack the $10 you still owe on the end of the loan equalling $40K for six years, then tack their 2 or more intrest points on it and they make out like a bandit, and you think you actually got a good deal, so you don't challenge it.

In the end, Dealers will NEVER make a deal that loses money for them. No sales person ever lasted more than a couple days as a salesman by losing his company money. I know an Evo would be awesome, but anyone with knowledge of "orphaned" cars knows that when a car gets discontinued, the depreciate like a rock sinking to the bottom of a lake. This salesman is probably trying to entice you into this deal by relying on your love of performance cars to rid himself of a car that will most likely sit on his lot for quite a while and depreciate thousands of dollars before it's even sold...

[fjroman2]

I am still trying to understand the deal. So..."He would give me $10,000 for my car and the remaining $10,000 i have left he will carry it over onto the new 2014 Evo 10" - I interpret this as him giving you $10k cash to put toward the new car, but you owe $10k still...so...you would basically be getting the $35k car for $25k and your car?

[Woodie]

$35K and the Kizashi, it's a disaster, but so is the current situation.

[bootymac]

I am still trying to understand the deal. So..."He would give me $10,000 for my car and the remaining $10,000 i have left he will carry it over onto the new 2014 Evo 10" - I interpret this as him giving you $10k cash to put toward the new car, but you owe $10k still...so...you would basically be getting the $35k car for $25k and your car?

Kuro summed it up quite nicely:

All it seems is that he offered a 10K trade-in for your Kizashi.

[fjroman2]

yeah, I guess that was my question...was that actually what he offered? $10k...it seems what Kuro is suggesting is he offered him $10k cash and then essentially wiping out his remaining loan on the Kizzy. How else would the remaning balance be $15k on a $35-$40k car?

[KuroNekko]

yeah, I guess that was my question...was that actually what he offered? $10k...it seems what Kuro is suggesting is he offered him $10k cash and then essentially wiping out his remaining loan on the Kizzy. How else would the remaning balance be $15k on a $35-$40k car?

It wouldn't be 15K. It would be 25K at the lowest given 35K is the price of a base Evo. All it sounds like the sales guy offered was a 10K trade-in and a transfer of his remaining debt on the Kizashi to the Evo. This means he still would have 25K in payments. In essence, there is no special deal.
The only consideration BxKizashiS needs to make is whether he thinks his Kizashi is worth 10K.

[fjroman2]

Ok...I am with you now

[gmkizashi]

If you could walk out with an Evo for 25 grand, after they give you 10 k as a trade and roll the 10k you are upside into the Evo, I would do it.

I think in reality however, you would be walking out of there with a 45k loan .

I'm not sure if I missed something here but I'm not getting the math.

Evo Selling price. 35,000
Kizashi loan balance. 20,000
Trade allowance. -10,000
Amount financed. 45,000

[LPSISRL]

Does the OP ever say what the price was for the EVO? All I see are trade-in and loan pay-off numbers. It looks like the 40k, 35, etc are for-instances.