Can You Trade in a Financed Car?

Buying a car

Many drivers like the idea of saving on their next vehicle purchase by trading in their current car. However, what if you still owe a bit on your loan. Can you trade in a financed car? The answer to this question is definitely yes! It is possible to trade in a financed car, however, there are a few factors to consider before doing so. When you trade in a car, the amount you still owe on the loan does not go away. You are still responsible for the remaining balance. Learn more about your options for trading in a car that still has a loan balance with LAcarGUY. We are your go-to source for information about car loans and interest rates, selling a car, leasing a car, credit scores, and more.

How Does Trading in a Financed Car Work?

  1. Before you can trade-in your current vehicle, you will need to know how much of a balance is left on your loan. Usually, you will be able to find this information on your monthly statement.
  2. Find out what your car is worth. There are also plenty of options out there, such as Kelley Blue Book. Keep in mind that this is simply an estimate. We will not be able to determine what the car is worth until it’s inspected.
  3. If your vehicle has a higher value than the amount left on the loan, that money can be put toward the cost of your new car.
  4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car – this is called negative equity. If this is the case, you have two options. Before you purchase a new car, you can pay off what is owed on your current vehicle, or you may be allowed to roll over the balance into your next auto loan.

The Basics of “Rolling Over” a Loan

Rolling over a loan is when a dealership says they will pay off your old loan no matter the amount that is still owed. Once again, this does not mean that you are no longer responsible for that amount. What is leftover is now added to the loan you take out on the new car. When you opt for this method, you pay the dealership back for the old loan at the same time that you pay off the loan on your new vehicle.

Turn to LAcarGUY for Stress-Free Auto Financing

When you’re ready to trade in a financed car for lease or get behind the wheel of a brand new car, make LAcarGUY your first stop. In addition to our incredible selection of vehicles, we also offer some of the most competitive financing rates in the area. To help you save even more, be sure to take a look at our new vehicle specials. Feel free to contact us for more information.

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