Has anyone traded in a car with an outstanding loan on it?

[Zeffy]

I bought a new 2017 Honda Civic Coupe Touring about a week and a half ago. I traded in my old 2013 Civic which still had 7.6k still owed on it, but I got 7.5k for the trade in and then rolled the remainder into a new loan for the new car. Does anyone know how long it takes for the dealer to payoff the loan (they said they will handle it; I just had to provide a payoff figure), as I'm curious to know when I can see the previous loan drop off of my account? Also, how long does it take to receive your new loan paperwork in the mail (I was able to finance at the best rate offered by Honda's Financing Division) so I can set up my payment info and whatnot so I don't have to worry about it?

Wasn't sure how long it may take on average. I received my new NJ plates only 4 days after I purchased it!

[hbelkins]

I bought a new 2017 Honda Civic Coupe Touring about a week and a half ago. I traded in my old 2013 Civic which still had 7.6k still owed on it, but I got 7.5k for the trade in and then rolled the remainder into a new loan for the new car. Does anyone know how long it takes for the dealer to payoff the loan (they said they will handle it; I just had to provide a payoff figure), as I'm curious to know when I can see the previous loan drop off of my account? Also, how long does it take to receive your new loan paperwork in the mail (I was able to finance at the best rate offered by Honda's Financing Division) so I can set up my payment info and whatnot so I don't have to worry about it?

Wasn't sure how long it may take on average. I received my new NJ plates only 4 days after I purchased it!

I can pretty well guarantee you'll get your paperwork (payment book) within the month so you can make your first payment. 

[AsphaltPlanet]

Semi related question... If you buy a car in the US, and finance it through the dealership, do you have to make physical payments, or do you just set up automatic payments by providing a void cheque?

[Rothman]

I have been able to set up autopay.  They still may give you a payment book initially, though.

[Brandon]

I bought a new 2017 Honda Civic Coupe Touring about a week and a half ago. I traded in my old 2013 Civic which still had 7.6k still owed on it, but I got 7.5k for the trade in and then rolled the remainder into a new loan for the new car. Does anyone know how long it takes for the dealer to payoff the loan (they said they will handle it; I just had to provide a payoff figure), as I'm curious to know when I can see the previous loan drop off of my account? Also, how long does it take to receive your new loan paperwork in the mail (I was able to finance at the best rate offered by Honda's Financing Division) so I can set up my payment info and whatnot so I don't have to worry about it?

Wasn't sure how long it may take on average. I received my new NJ plates only 4 days after I purchased it!

The dealer isn't paying it, you are.  It's been rolled into your new loan.

Also, why didn't you just transfer the license plates to the new car?

Semi related question... If you buy a car in the US, and finance it through the dealership, do you have to make physical payments, or do you just set up automatic payments by providing a void cheque?

Either.  You can have them send you the bill each moth, or you can set up automatic payments.

[Zeffy]

The dealer isn't paying it, you are.  It's been rolled into your new loan.

Also, why didn't you just transfer the license plates to the new car?

Well, I know technically I'm paying for it. What I meant was that they are going to contact the old company my first loan was from and pay it off on my behalf.

I had to get new plates because on my old ones, due to my nonexistent credit at the time, my sister was the primary / registered owner of the vehicle. Because my new car is wholly in my name, I had to get new tags which showed just myself as the primary owner.

Semi related question... If you buy a car in the US, and finance it through the dealership, do you have to make physical payments, or do you just set up automatic payments by providing a void cheque?

A lot of places allow you to make online payments by linking your checking or savings account to an online portal for your loan where you can then make payments (or set up a recurring automatic payment).

Also, if anyone was curious what it looks like (you can see the front of it in my avatar here):

[Brandon]

The dealer isn't paying it, you are.  It's been rolled into your new loan.

Also, why didn't you just transfer the license plates to the new car?

Well, I know technically I'm paying for it. What I meant was that they are going to contact the old company my first loan was from and pay it off on my behalf.

Yes, that's basically what will happen.

I had to get new plates because on my old ones, due to my nonexistent credit at the time, my sister was the primary / registered owner of the vehicle. Because my new car is wholly in my name, I had to get new tags which showed just myself as the primary owner.

OK, so your sister owns the plates, and you had to get new ones then.

[jeffandnicole]

Semi related question... If you buy a car in the US, and finance it through the dealership, do you have to make physical payments, or do you just set up automatic payments by providing a void cheque?

In most cases you just go on to the financing's website and set it up thru your account's page...you don't have to mail in a check. 

Now...can you do that if you buy a vehicle in the US but you live in Canada? That, I don't know.

[AsphaltPlanet]

I'm not looking to buy a vehicle in the US, but I'd never heard of the concept of a "payment book" before.  I have purchased two new cars in my life, and during both transactions (through different automakers), I agreed to a term, and a price, and then provided a void cheque to the dealer, and then every two weeks, the agreed payment amount was automatically withdrawn from my bank account through the credit agency without any action on my part.

[hbelkins]

I'm not looking to buy a vehicle in the US, but I'd never heard of the concept of a "payment book" before.  I have purchased two new cars in my life, and during both transactions (through different automakers), I agreed to a term, and a price, and then provided a void cheque to the dealer, and then every two weeks, the agreed payment amount was automatically withdrawn from my bank account through the credit agency without any action on my part.

I try to avoid anything that automatically deducts any sum from my checking account on a given date. I want to be in control of when that money comes out of my account in case there's a cash flow issue. There's typically a float period between when the payment is due and when it becomes delinquent and subject to late fees. If your payment is due the 5th of the month but it doesn't become late until the 15th, you're good. I had one loan that was due on the 1st day of each month, but I typically didn't mail the check until the 1st, and it took a minimum of two days for the payment to get there. It was never an issue.

As for license plates, in Kentucky, the plate stays with the car unless it's a personalized plate, which can be transferred from one vehicle to another.

[AsphaltPlanet]

I wasn't really making a statement about which method was better, it was just something I'd never heard of.

I will say though it seems Americans are generally more reluctant to adopt more electronic forms of banking than citizens in other countries.

[DaBigE]

I wasn't really making a statement about which method was better, it was just something I'd never heard of.

I will say though it seems Americans are generally more reluctant to adopt more electronic forms of banking than citizens in other countries.

It may not always be reluctance, and instead some antiquated, obscure tie to the legal system. For instance, many of our contracts still have to be physically signed and mailed versus sending an electronically signed PDF attached to an email.

[Zeffy]

I must be the opposite. I would much rather use any online form of banking. I didn't even know you could write a void check to have it taken from your account automatically!

I manually pay my credit card balances (I don't carry over one unless I have a special financing deal) but any sort of large recurring payment is set up so it is automatically taken from my account so that it gets to where it needs to be on time.

[hbelkins]

I must be the opposite. I would much rather use any online form of banking. I didn't even know you could write a void check to have it taken from your account automatically!

Lots of places that do automatic payments have it set up that way. I guess they want to see the account and RT numbers for themselves, or they need to scan the check.

[Scott5114]

My car loan is done through the same bank that I have an account with. It shows up on my online banking system as an account with a negative balance. Whenever my payment is due, I transfer money to it the same way I would transfer money from checking to savings.

[PHLBOS]

Since 1988, I've had 4 car loans; all of them of which I've done via payment books.  And like HB, I want to be in control when that money comes out of my account... especially if I want to double or even triple my payments on a given month (when I'm financially able).  Doing such enabled me to pay off the loans (4 or 5-year terms) 2 to 3 years earlier.

The only time I did not pay off my car loan early was when I traded in a car that still had a lien on it circa 1992 for a newer model that I financed; the remaining amount was rolled into the new loan.  About a year later, I refinanced that loan to get a lower interest rate & monthly payment; which, over time, allowed me to pay off the loan earlier by doing the fore-mentioned doubling/tripling the monthly payments.

[jeffandnicole]

I've either had payment books or monthly statement coupons sent to me. 

In one of the most backasswards ways of doing it, my current mortgage provide mails me a combined coupon for the next month's payment & statement showing some financial data.  I pay it online.  They mail me a confirmation of the online payment.  Then they mail me the next month's coupon & statement.

[AsphaltPlanet]

Since 1988, I've had 4 car loans; all of them of which I've done via payment books.  And like HB, I want to be in control when that money comes out of my account... especially if I want to double or even triple my payments on a given month (when I'm financially able).  Doing such enabled me to pay off the loans (4 or 5-year terms) 2 to 3 years earlier.

The only time I did not pay off my car loan early was when I traded in a car that still had a lien on it circa 1992 for a newer model that I financed; the remaining amount was rolled into the new loan.  About a year later, I refinanced that loan to get a lower interest rate & monthly payment; which, over time, allowed me to pay off the loan earlier by doing the fore-mentioned doubling/tripling the monthly payments.

I don't think that is exactly the same type of loan.  If I were to buy a car using a third party credit agency, I would have an account like that you're talking about where it would just have a negative balance and it would be up to me to ensure money gets into that account on a timely basis.

If I instead finance the car through the dealership, I just have monthly (or in my case biweekly) payments that are automatically withdrawn from my account.  In my case, I financed my current car through Ford's credit service at 0% financing.  (I know that the financing costs of the car are just built into the windshield price of the car).  But that said, because it is financed in such a way, there really is no incentive for me to want to pay the car off any faster than the term, as there are no interest charges over the term.

If I'd have negotiated a car loan at a third party credit agency and then paid the cash purchase price to the dealer, I could have an account set up the way that you speak of it, and then would probably want more control over my repayment schedule to try and minimize interest.

[Rothman]

I try to avoid anything that automatically deducts any sum from my checking account on a given date. I want to be in control of when that money comes out of my account in case there's a cash flow issue.

Having a steady income that covers one's expenses would definitely affect the decision to use autopay or not, especially if one needs to play the grace period game in getting their bills paid.

Still, although I also used to think that it was better to have control over payments and whatnot, have to say that there's no going back once you get sucked into the autopay game.  It is just far too convenient.  I have 10 routine bills that have to be paid every month; the time saved by not having to worry about them being paid is actually quite noticeable, even if I spend it laid out on the couch watching junk streamed from the Internet.

[1995hoo]

I use online banking to pay the bills, but I do not authorize any creditor to take money from my account. I program the payment and the date (almost always the day before the due date with one or two exceptions). For some things, like HOA dues, I set up a 12-month recurring payment plan, but again, I control it, not the HOA.

I do receive most bills electronically and that definitely streamlines the process. I also have no car payment right now (all of them are paid off) and no student loans, so the mortgage and the HOA are the only two that I know will always be the same throughout a 12-month period (and they both always change after 12 months).

[kphoger]

I try to avoid anything that automatically deducts any sum from my checking account on a given date. I want to be in control of when that money comes out of my account in case there's a cash flow issue.

Having a steady income that covers one's expenses would definitely affect the decision to use autopay or not, especially if one needs to play the grace period game in getting their bills paid.

1.  A steady income is a vapor, dispelled by the loss of a job or a major unexpected expense.

2.  Does not address the disadvantage mentioned earlier about not having the freedom to pay extra one month or every month.

[vdeane]

Call me a control freak, but I don't like the idea of having money taken out of my bank account by someone other than me.  Plus it's a security risk.  What if your electric company or someone else gets hacked?  Most of my bills are paid manually on my bank's online bill pay site; the autopays I do have all go to my Discover card (which at least has a little protection if someone tries to overcharge me or someone gets hacked), and I have specific reasons for having them:
-Verizon FiOS because Verizon makes it mandatory if you only have one service
-Cricket because of a $5/month discount, it's prepaid, and I don't want to risk my phone number
-E-ZPass, because it's required to refund the $10 tag deposit, and it's convenient when I rack up a bunch of tolls (like when I clinched the NYC interstates, and in two weeks when I go to the Beckley meet and clinch and photo parts of the PTC on the way)
-Netflix because it's what you do; if you want to save 15% or  more on car insurance, you switch to Geico.  It's what you do. (sorry, couldn't resist)

[Duke87]

My aversion to having a third party debit my bank account directly was broken when I was presented with three options for paying my electric/gas bill:
1) pay with a credit card, and pay a $5/month fee
2) have them debit my bank account, with no fee but a small risk that something borking would directly impact my bank account balance.
3) manually put a check in the mail every month, or pay in person at one of their offices

And I decided that #2 was the least evil of the three options.


Today, there are several entities I have given my bank account info so they could take money out or put money in on my behalf. The one time I've had something happen with that account that wasn't supposed to, it was not because of any of these entities but because of a skimmer someone had placed on an ATM I used.

[hbelkins]

Plus it's a security risk.  What if your electric company or someone else gets hacked?

Nothing should happen. If your account gets drained because of a hack, they have to make you whole again.

My aversion to having a third party debit my bank account directly was broken when I was presented with three options for paying my electric/gas bill:
1) pay with a credit card, and pay a $5/month fee
2) have them debit my bank account, with no fee but a small risk that something borking would directly impact my bank account balance.
3) manually put a check in the mail every month, or pay in person at one of their offices

And I decided that #2 was the least evil of the three options.

I'm at the post office four or five times a week, since that's where I get my mail. It's a five-minute-or-less stop on my way home from work. And since I'm the person who mails the stuff my wife sells on her eBay store, that necessitates me going to the post office in the town where I work on my lunch break to mail those items. It's no great inconvenience for me to spend 90 to 120 seconds writing a check and sticking it in an envelope and then dropping it in the mail slot at the post office when I check my mail or go to mail one of Melissa's packages. Beats the heck out of the possibility of an automatic payment draining my account if my balance drops too low, or if I'm putting off paying a certain bill because another one has priority and I only have a limited amount of funds.

[Rothman]

If you pay by check, the routing number and account number are right on the check.  Every method has security flaws.