What is overtrade really?

[Mentholatum]

Dear bros, can anyone please help to explain what is overtrade "really"? I always (used to) believe that it's basically an extra amount of "discount/loan" to offset the low trade-in price off my car. But so far, a few SEs told me that it's a discount and will not be pegged onto my new loan. If its true, why don't they just give me a higher trade-in price.

I'm not very convinced by the way.......many thanks for the advice.

 

[detach8]

Re: What is overtrade really?

It the same... buy lower or sell higher, you choose...

buy 100k - sell 40k = 60k loan
buy 120k - sell 60k = 60k loan

 

[Mentholatum]

Re: What is overtrade really?

It the same... buy lower or sell higher, you choose...

buy 100k - sell 40k = 60k loan
buy 120k - sell 60k = 60k loan

Thanks bro, can I confirm that it's effectively "really" a discount and not pegged to the loan? Many thanks!

 

[hitmee]

Re: What is overtrade really?

It the same... buy lower or sell higher, you choose...

buy 100k - sell 40k = 60k loan
buy 120k - sell 60k = 60k loan

I thought they won't change the list price?
Only shift ur trade in price.

Question should ask is
Why different sales giving diff over trade for the same model?

 

[detach8]

Re: What is overtrade really?

Yes it's just a discount. They will still declare the full amount of the car to the hire purchase company, but of course your loan interest is pegged to whatever amount you take. Doesn't really matter.

 

[Mentholatum]

Re: What is overtrade really?

I thought they won't change the list price?
Only shift ur trade in price.

Question should ask is
Why different sales giving diff over trade for the same model?

Thanks bro, different SEs give different overtrade and different explanation until I'm confused......

 

[Mentholatum]

Re: What is overtrade really?

Yes it's just a discount. They will still declare the full amount of the car to the hire purchase company, but of course your loan interest is pegged to whatever amount you take. Doesn't really matter.

Thanks for the affirmation again bro!

 

[wt_know]

Re: What is overtrade really?

car price at $120K ... give you $20K overtrade ... you can take x% loan x $120k as loan is based on car price
car price at $100K ... no overtrade ... you can take x% loan x $100K only

1. to increase loan quantum to help budget tight buyer
2. to help buyer who has outstanding loan to settle the old car and buy new car

 

[lim_ck]

Re: What is overtrade really?

like what wt_know says, it's usually for loan processing.

if not how does car dealers advertise for $1 downpayment and drive away when banks/finance institutions does not allow for 100% of loan of car price. So what the car delers do is to tell the banks that you are actually taking 90% of the car price as loan (as example) and the other 10% is part of the overtrade to you.

car selling price is 90K with 10k overtrade. dealer tell bank they selling car to you at 100k and you taking loan of 90k which is 90% of car "selling price". once loan approved for 90k, you can technically drive away the car with no downpayment.

 

[wobbles]

Re: What is overtrade really?

+1 to what all the bros said above. Only thing to remember is the longer the loan, the higher the interest rate, so best is if you can discipline yourself to a loan quantum & time frame that best suit you, and stick to that plan like a PRC xmm would to an old fogey that's just received his CPF payout.

Then, whatever overtrade you get will actually count towards a real discount off the selling (usually stubbornly fixed) listed price, and not go on to subsidize an inflated loan amount.

 

[Darth Vader]

Re: What is overtrade really?

overtrade is physiological warfare applied to sales.when other car traders quote you 100k for your old car and PML quote 120k for it.somewhere in your brain, you have the feel good factor thinking you got the best deal in sg, so without thinking twice you signed the purchase agreement without noticing that the extra 20k is charged in the new car.

 

[hitmee]

Re: What is overtrade really?

Worst they mark up 20k but give u 5k over trade

 

[brosiss]

Re: What is overtrade really?

Price list and discount are pretty standard.

Overtrade is how much they going to pay u for your trade in car. If you owe the bank less than overtrade value, they will hold credits in another agreement. In case you like to withdraw, switch your purchase, etc.. So it is cleaner to have separate agreement. Then this credit will be used to offset the price of car purchased and the balance for bank loan. They will bid or allot Coe once ur loan is approved.

Not sure about the scenario when you owe the bank more than trade in value.

 

[Mentholatum]

Re: What is overtrade really?

I'm getting more confused now. SE told me that the overtrade will not be pegged to my loan, it's a discount in another form as selling price cannot be changed (fixed). I'm not convinced, thus wanted to confirm.

Only PA gave me the quote I wanted. I told the SE no gimmicks, just up the trade-in value of my car, and he match it.......

 

[Mentholatum]

Re: What is overtrade really?

overtrade is physiological warfare applied to sales.when other car traders quote you 100k for your old car and PML quote 120k for it.somewhere in your brain, you have the feel good factor thinking you got the best deal in sg, so without thinking twice you signed the purchase agreement without noticing that the extra 20k is charged in the new car.

This is precisely what I'm afraid of......

 

[lim_ck]

Re: What is overtrade really?

overtrade can be given with or without trading in a car. when i bought my first car, i was given an overtrade as well even though there is no car to trade in. the overtrade amount was added to the car's actual selling price and declared in the bank loan form.
example
overtrade given is 6k
car actual selling price is 80k
bank loan form put car's selling price at 86k

Mentholatum, don't need to get flustered over this confusion. at the end of the day, what you need to know is these amounts

how much loan outstanding (if any) you have to bank for existing car and what is the final settlement amount - $A
how much is PML going to buy this existing car from you - $B
how much $ you need to top up or get back - top up is when $A > $B and top up amount is $A - $B. get back amount is when $B > $A and amount back is $B - $A

if you are getting back $$$ from PML for selling your existing car, let's name this amount $C.
how much are you going to put as downpayment (including booking fee) for the new car from PML? - $D
what is the price of the car PML is selling you - $E

so your loan amount should be $E - $C - $D

now let's give an example with values

current outstanding loan for car - $10k
PML paying for your car - $15K
money back from sale of car and settle loan - $5K
downpayment for new car - $20K
new car price - $200K
total loan needed = $200K - $5K - $20K = $175K

of cos if you decide to use the extra $ from sale of car as part of downpayment, then the loan needed will be $180K in the above example.

if you did not notice, i had not factored in the overtrade $$$ in my above example. why? cos at the end of the day, the overtrade is just a number which is irrelevent. what's most important is the actual $$$ you need to transact and not some virtual $$$ like overtrade.

 

[Mentholatum]

Re: What is overtrade really?

overtrade can be given with or without trading in a car. when i bought my first car, i was given an overtrade as well even though there is no car to trade in. the overtrade amount was added to the car's actual selling price and declared in the bank loan form.
example
overtrade given is 6k
car actual selling price is 80k
bank loan form put car's selling price at 86k

Mentholatum, don't need to get flustered over this confusion. at the end of the day, what you need to know is these amounts

how much loan outstanding (if any) you have to bank for existing car and what is the final settlement amount - $A
how much is PML going to buy this existing car from you - $B
how much $ you need to top up or get back - top up is when $A > $B and top up amount is $A - $B. get back amount is when $B > $A and amount back is $B - $A

if you are getting back $$$ from PML for selling your existing car, let's name this amount $C.
how much are you going to put as downpayment (including booking fee) for the new car from PML? - $D
what is the price of the car PML is selling you - $E

so your loan amount should be $E - $C - $D

now let's give an example with values

current outstanding loan for car - $10k
PML paying for your car - $15K
money back from sale of car and settle loan - $5K
downpayment for new car - $20K
new car price - $200K
total loan needed = $200K - $5K - $20K = $175K

of cos if you decide to use the extra $ from sale of car as part of downpayment, then the loan needed will be $180K in the above example.

if you did not notice, i had not factored in the overtrade $$$ in my above example. why? cos at the end of the day, the overtrade is just a number which is irrelevent. what's most important is the actual $$$ you need to transact and not some virtual $$$ like overtrade.

Thanks you so much bro, very much clearer now!

 

[wt_know]

i simply ask the SE no bullshit
what is the nett nett nett selling price for the car after all the sun moon star disc rebate overtrade and free floor mats

dun be smoke by all the terms. the final price is the answer.

 

[MapleLeaf]

Re: What is overtrade really?

If what you said is accepted by all their sales staff - got actual car trade in or no trade in, just deduct trade-in value - then the 520 that I WAS interested should be $250,888 less $28,000.

My SA told me F10 520 nett nett is $250,888. And very cocky - tell me want to buy BMW, don't think so much.

 

[wt_know]

Re: What is overtrade really?

that's my take ... overtrade is GIVEN whether there is trade in or no trade in of used car
SE ever told me if got trade in, overtrade could be adjust even higher if your used car is 2+- years old (low milleage) & PML unit because PPSL wants to eat it and resell (another profit making)

you are right ... when sale is good, stock is low, demand>supply, very cocky ... overtrade not applicable if no trade in.

again ... in the world of buy-n-sell ... willing buyer willing seller ... if many (sucker) wants to buy even with no overtrade ... who to blame? seller or buyer?

If what you said is accepted by all their sales staff - got actual car trade in or no trade in, just deduct trade-in value - then the 520 that I WAS interested should be $250,888 less $28,000.

My SA told me F10 520 nett nett is $250,888. And very cocky - tell me want to buy BMW, don't think so much.