Am I Wrong?

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Fendi

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Apr 2, 2021
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I am sorry if this seems like something that I should be able to figure it but I have tried and I can't get it right. So I know it must be something I am doing wrong. So if you can help me I would be most grateful. My problem is below:

I can figure out why (25,000 + 30,000 = 55,000 - 15,000 = 40,000) but does not come to this amount if I take (30,000 -15,000 =15,000 + 10,000 = 25,000). Now basically the numbers look good to me in as much as I know 15,000 from 55,000 equals 40,000. I also know that 10,000 and 15,000 equals 25,000. These numbers were presented to me as I was attempting to purchase a car. The first set of numbers were presented by a car salesman and the second set of numbers are mine.

So the 30,000 represents the New Car, the 25,000 represents my current debt on my present auto. The 15,000 represents the trade in value on my current auto. I the first example what was laid out by the sales person. The cost of the new car is added to the current debt and then the trade value is subtracted. The amount I would finance would be 40,000. The second example is my numbers the New car at 30,000 minus 15,000 which is my trade in equals 15,000 plus 10,000 which is my negative equity. I get 25,000 and that's all I get. Does anybody else get something different? What am I missing or was this guy trying to cheat me? I figured some fresh eyes might help. Thanking you in advance.
 
You have negative equity on your trade. You owe $25000 on it and you’re only getting $15000 credit for it.

This is called an upside-down situation ... you’re paying $30000 for the new car plus the $10000 you still owe on your trade.
 
Yes I understand that the negative equity gets added to the cost of the new car. However the value of my trade in which is 15,000 dollars gets subtracted So it would be 30000 plus 10000 minus 15000 which equals 25000. The sales persons numbers were 40000 and this was before finance.
 
Fendi said:
I am sorry if this seems like something that I should be able to figure it but I have tried and I can't get it right. So I know it must be something I am doing wrong. So if you can help me I would be most grateful. My problem is below:

I can figure out why (25,000 + 30,000 = 55,000 - 15,000 = 40,000) but does not come to this amount if I take (30,000 -15,000 =15,000 + 10,000 = 25,000). Now basically the numbers look good to me in as much as I know 15,000 from 55,000 equals 40,000. I also know that 10,000 and 15,000 equals 25,000. These numbers were presented to me as I was attempting to purchase a car. The first set of numbers were presented by a car salesman and the second set of numbers are mine.

So the 30,000 represents the New Car, the 25,000 represents my current debt on my present auto. The 15,000 represents the trade in value on my current auto. I the first example what was laid out by the sales person. The cost of the new car is added to the current debt and then the trade value is subtracted. The amount I would finance would be 40,000. The second example is my numbers the New car at 30,000 minus 15,000 which is my trade in equals 15,000 plus 10,000 which is my negative equity. I get 25,000 and that's all I get. Does anybody else get something different? What am I missing or was this guy trying to cheat me? I figured some fresh eyes might help. Thanking you in advance.
Click to expand...
30000 = cost of new car
15000 = trade-in value of old car
15000 = goes to car dealer
25000 = needed to pay off old loan
40000 = amount of new loan

He was not cheating you.

You are double counting the trade-in value of the old car.

You can think: I am only paying 15000 net for the car, 30000 - 15000
And 15000 + 25000 to pay off old loan is 40000.

You can think: It only takes 25000 - 15000 = 10000 to pay off old loan
And 10000 + 30000 to buy the new car is 40000.

What you cannot do is say

Net cost of new car is 30000 - 15000 = 15000
Needed to pay off old debt is 25000 - 15000 = 10000

It is true that 15000 + 10000 = 25000. But you got 15000 and 10000 by subtracting the trade-in value twice.
 
When you trade in your vehicle regardless of the amount of value basically the dealer is buying it from you. So he can not bill that part to your new car. So in my case my trade in should have been 15000 subtracted from the new purchase as a credit of 15000. The amount (of my negative equity 10000) gets added to the new car. The only amount left after subtracting the Trade in amount is the 10000 dollars so how or where did I add that twice. It's not possible.
 
Fendi said:
However the value of my trade in which is 15,000 dollars gets subtracted.
Click to expand...

the $15000 gets subtracted from the $25000 you owe on the old car, not from the price of the new car.

you still owe $10000 on the old car before even thinking about buying anything new
 
Let's do this separately. Suppose you buy the car at one place and sell the car at another place.
1) You buy a car for $30,000--you owe the car dealership $30,000
2) You sell your car for a $10,000 loss--You get $15,000 in cash from selling your car. You give all of it to whoever loaned you the money. So that $15,000 is gone. Now you still owe $10,000 for the original car loan.

In all, you now owe $30,000 + $10,000 = $40,000

Suppose you just do all the transaction at the dealership.
The car cost $30,000 and you are getting $15,000 for the trade in. So you now owe the dealership $15,000 for the new car. AND you still owe the $25,000 for the original car loan. The $15,000 for the trade can not go both to decrease the new car price by $15,000 AND reduce what you owe on the car loan by $15,000. That would be nice but it does not work that way.
 
Last edited:
25,000 + 30,000 = 55,000 - 15,000 = 40,000
Pleas do not write math like this.
You know that 25,000 + 30,000 = 55,000 but you wrote that 25,000 + 30,000 = 55,000 - 15,000 which is not true.

You also wrote that 30,000 -15,000 =15,000 + 10,000 which again is not true. 30,000 - 15,000 = 15,000 NOT 15,000 + 10,000 !
 
Here is a good example.
Suppose you buy a new car for $30,000. You trade in a car for $30,000 and you owe $30,000 on that car.
So using your math, you owe nothing for the new car and the loan is paid off. Please try your math with this one and see for yourself that you trade in your car for the value you owe on it and get the new car for free.
 
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