Initial Deal:
- You purchase a new car with a rebate and use it to cover the negative equity on your trade-in.
- Rebate Amount: $5,000
- Negative Equity: $4,000
Second Deal:
- Within a month, you find a different car that you prefer, potentially better features, performance, or a different model that catches your interest.
- You decide to trade in the recently purchased car.
- Trade-In Value: Determine the current trade-in value of the recently purchased car considering market conditions and depreciation.
- Let's assume the trade-in value is $28,000 after factoring in depreciation within that month.
- You negotiate a good deal on the second car you want to purchase and agree on a competitive price.
- New Car Price: $32,000
- Down Payment: Use the trade-in value of $28,000 from the recent car you purchased as the down payment.
Result:
In this scenario, you make a down payment of $28,000 towards the new car price of $32,000, covering a significant portion of the cost. It essentially amounts to paying $4,000 out of pocket ($32,000 - $28,000), which is comparable to the negative equity you covered using the rebate on the initial deal.
Overall, it's important to ensure that both the vehicles involved (purchased and traded) are valued and negotiated properly to optimize your car-buying experience and minimize financial loss due to depreciation and potential negative equity.
