Zappafan

I have a 2018 A5 prestige with a outstanding note. i am looking to maybe go for a 2021 A5 or SQ5. Would it be prudent to pay down the note or save the cash and put down a sizable down payment? Either way the A5 would be a trade in. I would not be ready until May or later in 2021. In going through the numbers the amount of interest I'd be saving is negligible. I spoke to a friend who sells GM products and he says it would make no difference. Any ideas would help. Thanks to all.

Cheers
Z

Augster

My initial take on it is, as long as you don't owe more than it is worth by the time you go to trade in I wouldn't put any more money towards it. Since you'll almost never make money in a car deal I wouldn't tie up any more money into it that you won't really get back. I'd rather hold the cash until I'm ready to buy the next one.

Just my opinion. Good luck!

DaveSNJ

What do you owe v what the car is worth? What's the current financing rate?

If you're right side up and think you'll continue to be it probably make more sense to set aside $ for a larger down payment. If the current financing deals stick around (0%) you should just do a normal down payment and take the free $.

TheWombat

Yeah, as long as you are right side up, let the dealer handle the payoff. The net difference is negligible. Last time I bought, I paid off my car early but the bank took months to send the freakiin' title. If you just trade it in at the dealer and use the equity for the down payment, it's much easier.

Of course, if you can sell privately and get substantially more for your car, that would be the way to go, but selling a car with a lien while not impossible by any means is a bit trickier.

DaveSNJ

Don't forget that in most states there's a tax benefit to trading; you only pay sales tax on the net (sales price - trade value). If selling privately you'd need to sell for that same percentage more to cover the sales tax difference.

audi40

If as you say the interest savings is negligible, then hold the cash - one year is a long-way off and you may need/want that extra cash in the future.

Zappafan

Thank you all for your replies. I bought my auto in 07.18 as a CPO. It was a loaner and was never titled so I am the 1st owner with 5 yrs of bumper to bumper coverage. It just turned over 20,000 miles and I owe around $8.000. It is a wonderful car. I am looking forward to many enjoyable mile of fun, spirited driving.

Cheers and thanks again
Z