Can You Trade In a Financed Car?

Excited Couple Reviewing Trade in Offer with Salesman

Many of our Roseville area customers wonder: “Can you trade in a financed car?” The answer? Yes, you can! It’s entirely possible to trade in a financed car, but just because you do, that doesn’t automatically wipe out your car loan. So, how does trading in a financed car work? Whether you trade-in a financed car for lease or you buy a new vehicle, the process is similar. Learn more below with Sacramento Chrysler Dodge Jeep Ram, and know that if you have any questions at any time, you’re always welcome to contact us.

How Does Trading In a Financed Car Work?

  1. First, figure out the outstanding balance on your car loan, if any. it’s typically listed on your monthly loan statement.
  2. Use our Value Your Trade tool to estimate how much your current car is likely worth. Note that this is just an estimate, and it’s only once your car has been physically inspected that you’ll get a firm offer.
  3. If what you owe is less than your trade-in offer, then you’ll have money leftover that you can use to buy a new vehicle.
    1. For example, if you still owe $8,000 on your car in Folsom, and the dealer offers you $9,000 to buy the car, the loan can be paid off and you’ll have $1,000 to use towards your next new vehicle.
  4. If what you owe is more than the trade in offer, then you’ll have negative equity. In other words, you’ll have to pay your loan off! You can either do this in full, or roll over your old loan into your new loan.

What Does “Rolling Over” a Loan Mean?

Rolling over a loan is what happens when a dealership offers to pay off your old loan no matter how much you currently owe. Usually, what happens, is that if a dealer pays off your loan, it rolls those costs over into the new loan, meaning you’re essentially paying back the same amount either way. Accordingly, it’s always more financially prudent to have your car fully paid off before trading in your car. That said, if trading in is a must, it’s entirely possible to do, and the choice is, of course, yours.

Sacramento Chrysler Dodge Jeep Ram Has Your Next Car In-Stock

Ready to step into a new vehicle, regardless of whether or not your current car is paid off? Sacramento Chrysler Dodge Jeep Ram can help. Rely on our finance center for all your questions about how auto financing works. And don’t hesitate to give us a call for any reason!


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