Saved Vehicles

Can You Trade In a Financed Car?

Tiny car with coins and finance paperwork
 

Can you trade in a financed car? The answer is yes, but the process can be slightly more complicated. Though you’ll still be responsible for the leftover balance on your financed car, trading in a financed car can help you get into a more suitable model for your driving needs or budget. Find out “How does trading in a financed car work?” with the team at DeYarman Automotive Group, and get more car buying tips from our experts.

How Does Trading In a Financed Car Work?

Learning how to trade in a financed car for a lease or loan requires a little bit of research. However, the process doesn’t take up much of your busy schedule and this preparation will pay off during your appraisal meeting. Here are the steps for trading in a financed car:

  1. Find your latest monthly statement and locate the remaining balance of your vehicle.
  2. Use our Value Your Trade resource or other similar estimating tools to find out the current value of your vehicle. Keep in mind that this will be a ballpark figure, not a firm offer.
  3. Compare the remaining balance of your car to the current value of your car.
  4. If the remaining balance of your loan is less than the trade in value from the dealership, then you have “positive equity”. You can apply the extra money from your trade in toward your next purchase. 
    1. For example, if you still owe $7,000 on your car in Knoxville, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1000 to contribute towards your next car. 
  5. If the remaining balance of your loan is more than the trade in value from the dealership, you have “negative equity”. That means you’ll still owe money on your car. You can either pay the remainder or roll the balance over to the new car.

What Does it Mean to “Roll Over a Loan?”

If you still owe money on your old vehicle, you can still trade it in for a new vehicle and simply roll over the loan. But, what does “rolling over” a loan mean? It means your dealership will pay off your old balance – no matter how much you owe. What’s the catch? The price of the old balance will added to the price of your new car. That means you’ll pay off both the old and new cars simultaneously. This can still be a worthwhile investment if you need a different model immediately.

Rely on DeYarman Automotive Group for Your Car Shopping Needs

Still have questions about how to trade in a financed car for a lease or loan? Feel free to visit DeYarman Automotive Group to chat with our finance experts in person or just contact us online. We can help you find the best solution for your automotive needs.

 

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