Hi Rainfun,

If you have been late on this loan and have had poor credit issues, it is highly unlikely that you'll be able to obtain a loan from Toyota or any other lender on favorable terms. You can always apply, of course...but the new credit inquiry will give your credit profile yet another ding (albeit a minor one).

I would advise against your trading in your used Toyota for a new one, at least until your credit has "healed" considerably. Your car is just four years old, and will be fully paid off in less than a year. That will free up cash to invest, save, pay bills, etc. Meanwhile, you will avoid both the big depreciation loss you will pay by buying another brand new vehicle, and the high rate that a new vehicle would cost you.

For what it's worth, after my last vehicle was recently destroyed in a fire, I bought a 1999 Ford Escort sedan for $4,000, even though I could have afforded something much newer. (While I would enjoy a newer car, I don't work in a profession where I need a special vehicle, and our one child limits my need for extra passenger space). By doing so, I save big on depreciation, car loan interest, and insurance payments.

I hope this helps a bit. Good luck with your decision.