Can You Trade In a Financed Car?
The finance professionals at Green Light Auto Credit often receive the question, “Can you trade in a financed car?” Trading in a financed car in St. Louis is possible, but it’s important to remember that the loan balance from your trade-in will carry over. Florissant drivers can learn more about how does trading in a financed car work in our guide down below.
How Does Trading In a Financed Car Work?
- An essential first step when trading in a financed car is to check the remaining balance of your trade-in’s loan. You should be able to find the amount listed on your monthly statement.
- Use an online trade-in value tool like Kelley Blue Book’s to determine the value of the car you want to trade in. Keep in mind, however, that the number you receive is merely an estimate. When you bring your car to a dealership they will perform their own inspection before making an offer, which may not match the estimate you got online.
- If your auto loan balance is less than the trade-in offer you receive from the dealership, the difference can be applied toward your next purchase. As an example, if you owe $8,000 on your loan and the dealership offers $10,000 for your car, you can pay off your loan and use the remaining $2,000 toward your new purchase.
- What happens if your loan balance is more than what you were offered for your trade? This is called negative equity; in this instance, you would still be responsible for paying off the remaining loan balance. You have a couple of options here: pay off the remainder in full before getting your new car, or roll the balance over onto the new loan for the new car.
What Does it Mean to Roll Over a Loan Balance?
Some dealerships near Herculaneum may tell you that no matter how much you owe on your current loan, they’ll pay it off for you. If this sounds too good to be true, it’s because it is. In reality, your loan balance is carried over to your new loan for your next car. This means you are paying the dealership back for the old loan while also working to pay off the new loan.
Green Light Auto Credit Can Help With Your Next Auto Loan
If you’re looking to trade in a financed car for lease or are shopping around for a favorable new auto loan, turn to Green Light Auto Credit for help. No matter what type of credit you have, our team is dedicated to finding a solution that works. Contact us online to start a conversation today!
