Can You Trade In a Financed Car?
Can you trade in a financed car? The answer is yes, but you should know that trading the vehicle in doesn’t make your old loan disappear.
You’ll receive money for your trade in, and you can put it all towards your remaining loan balance if you like. There are also solutions for drivers who are underwater on their car loan. But if you’re still making payments, trading in a financed car can be tricky. How does trading in a financed car work if you’re near Pensacola, FL or Mobile, AL? Our guide has all the info you’ll need.
How Does Trading In a Financed Car Work?
Now that you’ve gotten the answer to the question, “Can you trade in a financed car?” it’s time to determine if it’s a good idea for your situation. Here’s what you should do if you’re thinking of trading in a financed car:
- Find your loan balance. If you recently received a monthly statement, it should be clearly visible there.
- Take advantage of our trade-in value calculator, or use a similar tool from a source like Kelley Blue Book! In either case, you’ll get an estimate. Only an in-person estimate will show you the true value of your vehicle, but you should always come prepared!
- In the best case scenario, you owe less on the vehicle than it’s currently worth. Congratulations! You can put the extra money towards a new or used vehicle of your choice.
- Can you trade in a financed car for a lease? Yes, you can! Trading in an old vehicle will reduce any down payment you have to make.
- In other cases, you’ll be “underwater” on your loan. This means you owe more than the vehicle is currently worth. If you have negative equity, you should use the trade-in money to pay off as much of your loan as you can. Then, try to “roll over” the balance of the old loan onto the new one.
Can You Trade in a Financed Car with Negative Equity?
As we’ve noted above, drivers who trade in a financed car may have the option to “roll over” an old loan onto a new one. What does “rolling over” a car loan mean? In practice, it means that the dealership will pay off your old loan, and add the money that they spent to the balance of your new loan. So, you’ll be making a slightly higher monthly payment than you otherwise would.
No Matter Where You’re At, the Sandy Sansing Finance Team Can Help.
You’ve seen that trading in a financed car is far from impossible. If you want to maximize the value of your trade-in and drive home to Ferry Pass or Cantonment in a model that you love, don’t wait! Reach out to the experts at your local Sandy Sansing financing department today.