How do I finance a new car while still owing on my current one and having not so great credit?

I was browsing for a newer vehicle than the one that I have currently which is a Kia Rio SX. I'm wanting to trade it in due to the fact that it needs costly repairs and I don't want to throw any more money at it. Only issue is I still owe $740 on it, but I'm not upside down. My question is my credit score is between 550 and 600 and I'm in the market for a Honda Fit I found at a dealership for $13,500. Has anyone ever had an issue financing a vehicle with fair credit and a trade in that still has an amount on it? Any tips? I'm also looking to have payments no more than $150 a month.

If you are not upside down then you'll have no trouble trading it in. The dealership will use whatever trade-in credit they offer to first pay off your remaining balance and whatever is left will be applied to the purchase price of the new(er) car.

The real issue will be your credit. You might find someone to loan you money for a car with sub 600 credit score but the loan terms won't be pretty and you'll pay through the nose in interest and fees.

You would be far better off to just spend a bit on repairs for the kia and drive it another few years while you clean up your credit.

All cars require repairs from time to time. Deferring repair work only increases the cost. It would be a lot cheaper to fix your current vehicle than to replace it. What are you going to do when the Fit needs work, trade it in for something else? Keep digging yourself a deeper hole? Your credit score reflects a failure to honor your obligations. Fix the Kia, then fix your credit before you take on more debt.

You only owe a few more payments on your car. You would be a lot better off figuring out how to make the final payments, then trying to sell it via a private party. But be mindful, neither the dealer or an individual might not want to make costly repairs either. So you should be looking at the value of your car in poor condition, which might mean you are upside down on the vehicle. Additionally, you will always receive more for the car selling it private party.

What is the Honda Fit worth? Telling us you found one for $13500 is meaningless. If it's a 2019, that's a great price… If it's a 2010 with 105000 miles on it, it's WAY over priced.

And the monthly cost of your payments should be a secondary consideration. What is more important is:
- what is the price of the car
- what is the cost of the car to get it out the door
- what is the interest rate on the car
- what is the payment length for the loan.

I can get you a $150 payment… All I have to do is add multiple years on to the loan.

Shop at used car dealers where they do their own financing.

You want payments of no more than $150 a month on a $13,500 used car? Either you are TROLLING or you don't have the merest grasp on reality kiddo.

Why? Because the longest loan term you can get on a used car is 48 months. If you divide $13,500 by 48 that is $281.25, not including interest. With such low credit, your interest rate, if you could even qualify for a loan would be in the neighborhood of 18%. But lets say you could get a loan at 10%. The payments would still be $342. But wait, that's not all. A loan is going to require a down payment of about 15%-20%. That means you would need between $2000 and $2700 in cash or your car would need to be worth at least that much as a trade-in.

But wait, there's even more. There's sales tax and a loan initiation fee, plus you'd have to roll the $750 you owe into the loan, and that might not be allowable. But let's be really optimistic. Let's add $750 to $13,500 and then say your car is worth $5000 as a trade in, so you'd still be financing $9,750 plus the loan fee, which is about 1%, so say $97, plus sales tax which could be 5% (a low figure), so add another $487. The total comes to $10,335. On a 4 year loan at 10% that comes to $262 a month.

Like I said, you're either dreaming or you're trolling us. Either way, EPIC FAIL.

A 600 credit score is a very low credit score and means bad credit.

What is average car payment per month?

blog.credit.com The average monthly car payment on a new vehicle in 2017 was a hefty $479.

Since then it has gone up. Forget it. Save up and pay cash.

Lets do the math together > You said you want to pay no more than $ 150 a month so If the Honda Fit is less than 5 years old all banks will allow 60 months. 60 x $ 150 is $ 9000 . You stated its $ 13500 so you are already $ 4500 short plus the dealer fee, tax, tag, which is most likely another $ 2000 . So, $ 6500 short and that's only if you break even on your trade. Your budget does not make sense, so with all due respect what's your next question

Your credit score is POOR, not fair, and you will find it impossible to get a car loan for anything close to $13,5000.

For you