Can You Trade In a Financed Car?

Can you trade in a financed car? Yes, you sure can! However, the current loan on your vehicle is still due even though you trade-in your car. Therefore, trading in a financed car is doable, but you are responsible for continuing payments on your car loan.

So, how does trading in a financed car work? At Chevrolet Of Fairbanks near Fort Wainwright, we will explain how trading in a financed car works. We also go over how to trade in a financed car for a lease. We cover all the bases, so you feel well-informed about your trade-in. Contact us to set up an appointment.

How Does Trading In a Financed Car Work?

Here is what you need to know when trading in a financed car:

1. Look at your monthly statement to find out how much you still owe on your loan.
2. We recommend using our Value Your Trade tool. Keep in mind that the value you receive is only an estimate. Your vehicle still needs to be inspected and, depending on the condition of your car, truck, or SUV, the number can change.
3. When you owe less on your auto loan than the trade-in offer from the dealership, you will have money left over. You can choose to use that money to go towards purchasing a new car.
4. However, if the remaining balance on your auto loan is more than the trade-in offer, you will still owe the remainder of your auto loan. If so, this is known as negative equity. Thus, you need to pay off your existing auto loan, or you can “roll over” your remaining balance onto the new auto loan with the dealer. However, keep in mind that the monthly payments on your next vehicle could be higher than your budget.

What Does “Rolling Over” A Loan Mean?

Trading in a financed car before you have finished paying off your balance does not mean you cannot get a new car. Instead, the remainder of your loan would “roll over” to your new auto loan monthly payments. However, that can only happen if the dealership agrees to pay off your current loan from the lender, and therefore you pay the dealership back over time.

The same would happen if you chose to trade in a financed car for a leased vehicle. Your payments will increase monthly. The amount you owe for trading in a financed car for a lease depends on what you still owe. However, it may be a little harder to get a loan with bad credit or if your remainder is still high on your current auto loan. If either of these is your situation, you will want to build your credit up to avoid high interest rates and pay down some of your loans before trading in your vehicle.

Rely on Chevrolet Of Fairbanks for Your Next Vehicle

Find out more on how you can trade in a financed car from our finance team. At Chevrolet Of Fairbanks, we are here to help you get behind the wheel of a new car even if you have an auto loan. Use our monthly car payment calculator as a guide to set a budget. Take a look at our new vehicle specials near Fort Wainwright and Eielson Airforce Base, and then view our new vehicle inventory to drive a car, SUV, or truck that you love!