If you’re looking to trade-in your car, you may be wondering when can you trade in a financed car? While trading in a car with a balance on it is possible, it doesn’t remove the obligation to pay off the loan. You will still need to make payments until the balance is zero. Here are some tips to keep in mind before trading in your car. It would help if you researched the value of the car you plan to trade-in.
One of the first things to do when trading in your financed car is to pay off the balance. Many dealerships do not require you to pay off the entire auto loan before trading it in. Your loan doesn’t disappear just because you trade the car in. A new dealership that accepts a trade-in is more likely to accept it if it is paid off completely. But the auto loan remains.
It would help if you waited to trade in your car until the debt was fully paid off. Most dealerships will buy the car outright for a percentage of its market value, adding it to the price of the new car.
One reason to trade in a financed car is to get a fair price. New cars lose approximately 20% of their value in the first year. When you trade in a financed car, you may also be able to get a lower lease payment.
While you can trade in a financed car for cash, it’s important to remember that negative equity in your car will be rolled into the new loan amount. This could make it much more expensive than you anticipated.
When can you trade in a financed car? The answer depends on your situation. If you have negative equity in your car, you’ll have to pay off the balance on your loan to get positive equity. Fortunately, most dealerships offer trade-in deals where you can trade in a car with negative equity. You should check the details with the dealership to ensure that the trade-in process is safe for you.
To get an accurate value of your vehicle, use the Kelley Blue Book or Value Your Trade tool. If you receive an offer that is more than your auto loan balance, you can use the money left to purchase a new vehicle. In addition, you can use the remaining loan amount to finance the new car. You may be surprised at the difference. It’s worth a try.