Can You Trade In a Financed Car?

A common question we hear at Sid Dillon is, “Can you trade in a financed car?” Fortunately, the answer is yes! It is possible to trade in a financed car — however, you are still responsible for the balance on the loan even after you trade in the vehicle. Our finance team is here to explain trading in a financed car, and we would be more than happy to answer any questions you may have.

How Does Trading in a Financed Car Work?

1. See how much you still owe on your auto loan. Usually, you will be able to conveniently find this information on your statement.
2. Estimate the value of your current car. Our “value your trade” tool can provide you with a quick and fair estimate, and once your vehicle has been inspected in person, we will provide you with an offer.
3. If what is left on the auto loan is less than the amount you were offered for your trade, you can use that amount toward the next car of your choice.
4. If the remaining balance of your auto loan is more than the amount offered for your trade, you will still need to take care of that amount. This is referred to as negative equity. You have a couple of options – pay off the remainder of the balance before you make your next vehicle purchase or roll over the balance into your next auto loan with the dealer.

What Does “Rolling Over” a Loan Mean?

Rolling over a loan does not mean that you are no longer responsible for the balance. The dealership pays off the old loan, but that price gets added to the new loan you take out. As you are paying off the new loan, you are also paying back the old loan at the same time.

Find the Vehicle of Your Dreams at Sid Dillon

Are you ready to trade in a financed car for lease? If you are interested in trading in a financed car, the team at Sid Dillon makes the process stress-free. Contact us today for more information. Or learn what you need to do to trade in your car.