Here's my situation. I bought a 98 Ford Expedition 9 months ago for 12,500. At the time, it had 72k miles and honestly, I was HAPPY to get financing (this was before I found CB). My scores were mid 500s. I got financing through Americredit at 19% (ick), but again, I was grateful that they were willing to finance me.

Well, now I've been pre-approved through a credit union for 6.75% and I feel it's time to get a newer truck because the miles are getting up there and it's silly that I"m paying 19% ir.

I want to buy a 00-02 Expedition. I have looked for a month now and FINALLY found one that is really, really clean and has very low miles (42k). I have been to about 10 dealers and they either have high mileage or they are not as clean as I would like, etc.

So, I find out I'm 2-3k upside down in my 98 4wd Exped XLT. The KBB trade in is only 7500 and I owe 10k.

So the one I found is being offered at fleet/internet pricing (whatever that means) for 16,750.

So we sit down to do the numbers and they tell me that it will basically be 21k out the door. My loan deficit added to their price + tax, title, license.

At first, I was like no way and I got up and left. They weren't budging on the price of my trade in OR the price of the SUV.

On the way home I started thinking about it. If I keep my SUV, it will soon have 100k miles on it and then it will be worth even LESS.

Am I better off just doing this deal and paying off my deficit at 6.75% instead of 19% which I'm doing now? My payments will basically stay the same because my loan now is for 36 months at $437/month. At 21k, my payments for 60 months will be about $420/month. I can pay $500 a month to help pay off some of that deficit each month.

Another concern is that the dealership mentioned that my credit union may not even finance that much because it's more than 100% of value. Well, KBB on the 01 is 19.5 so that's about right at 100%. Or do they also include TTL into that 19.5 figure. I've been approved for 25k.

I'm so confused...not really sure what to do here folks.

What do you all think? I'm driving myself nuts over this.

Any suggestions?

I'm not sure what Credit Union uses KBB. The ones I am familiar with use NADA and loan NADA Retail up to 120% LTV +++.

Marv, it's a local credit union here in Phoenix. I went with them because they only pull TU and they gave me 6.75%. They are called Credit Union West.

Here is what is posted on their website:
Affordable Loan

Low fixed rates for predictable payments
Flexible terms available
New cars - up to 100% of MSRP
Used cars - up to 100% of Kelley blue book
Same day approval or pre-approval
No prepayment penalties
Easy payments through optional Automatic Transfer

Perhaps the KBB thing is a geographical thing.

So, do you think they will be ok with the loan? The fincance guy at the dealership said they probably wouldn't do it but even if the price is 16.7 and they tack on 3k for my deficit, that's 19.7 which is just a little bit over the KBB. I can put $500 down and I should be under.

Their advance guidelines by whatever publication they use are usually +++.

Depending on how many miles you put a year on the Expedition, I would see if refinancing the car through your credit union would make more sense. If the car has been reliable thus far, why not see if keeping it would be a better alternative. The myth that cars just drop dead when they reach 100k miles is just that a myth. Cars are much more reliable these days as long as the recommended maintenance is done on them. I don't see why that Expedition won't last another 100k miles.

As Marv said once, drive slow and pay fast. Any vehicle loses value the longer you keep it. But that is offset some by your getting to use it. If you roll negative equity into a new loan, part of each payment will be still paying for the 98 you no longer have. I don't see much reason to trade in a known good-running 98 on a used (thus quite unknown to you) 2000 or 2001.

If you can find a private buyer to pay enough to pay off your 98 then you can go cleanly into the next deal. Definately refinance the 98 unless you're sure about selling it. Don't go another month at 19% now that your credit is better.

But wouldn't I be the in same situation that they may not refinance it because I'm upside down by 2k won't they expect me to pay that 2k and only refinance the 8k that's it worth?

You said you can pay an extra $500 a month. Try doing that to bring down some of the principle to the point where you can refi. And also send in that $500 down payment you have to also bring down more of the principle. Or you can apply that $500 down payment to the principle, refi the KBB value, and see if you can take out a personal loan for the $1500 you're in the hole for.

No, I said I can pay $500 (not an extra $500 a month). Meaning instead of $437, I can pay an additional $63 to make it $500.

Sorry that's what I meant. Adjust your monthly payments to $500.