Can You Trade In a Financed Car?

If you’ve been interested in making a vehicle upgrade, you’ve likely considered trading in your financed vehicle as an option. Although, can you trade in a financed car? Yes, you can! However, it’s important to remember that just because you trade in your financed Naperville vehicle, that doesn’t mean you’re no longer obligated to pay on the loan. Read on with the finance experts at River View Ford as we cover the ins and outs of trading in a finance car.

How Does Trading In a Financed Car Work?

1. Find out how much you still have to pay on your current loan. You can find this number on your monthly statement.
2. Use our Value Your Trade tool, or one from a service like Kelley Blue Book, to retrieve an estimate of how much your current automobile is worth. Remember, this is just an estimate, and only once your car has been physically inspected will the dealership be able to establish what it’s worth.
3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, you can put that leftover money towards purchasing a new vehicle from the dealer.
   1. For example, if you still owe $7,000 on your car in Montgomery, 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.
4. If the remaining balance of your auto loan is more than the trade-in offer, you still owe money on the car–otherwise known as negative equity. You can either pay off the remainder in full before buying your next car, you may the option to roll over the balance into your next auto loan with the dealer.

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

Rolling over a loan means that the dealership will pay off your old loan, no matter how much you owe. However, this doesn’t mean that you’re no longer responsible for that balance. Instead, that old balance gets added to your new car loan; meaning, you’ll be paying the dealership back for the old loan while you’re also paying for the new loan.

Get More Car Buying Tips from River View Ford

Whether you want to trade in a finance car for a lease to get behind the wheel of another financed automobile, the experts at River View Ford near Yorkville are here to help! Be sure to check out our new vehicle specials, where you can find great deals on popular models in our inventory. Then, browse our helpful car buying tips, so you can be well-prepared for your next automotive purchase!