Can You Trade In a Financed Car?

Wondering whether or not you can trade in a financed car? You absolutely can! Although, keep in mind that even when you trade in a vehicle, you still have to pay off the loan’s balance. Get the answer to, “how does trading in a financed car work?” with the finance experts at Macke Motors, Inc. in this handy guide before taking a look at our selection of used Chevy or a used Buick Enclave. 

How Does Trading In a Financed Car Work?

1. Check your vehicle’s monthly statement to find the remaining balance owed on the loan.
2. Use our Value Your Trade tool or one from a service such as Kelley Blue Book to get the estimated value of your current vehicle. Remember that this is just an estimate, and only once your vehicle has undergone a physical inspection will the dealership be able to determine what the car is worth. 
3. If the remaining balance of your auto loan is less than the dealership’s trade-in offer, then you’ll have money left over to put towards purchasing a new car.
   1. For example, if you still owe $11,000 on your car in Carroll, and the dealer offers you $12,000 to buy the car, the existing loan can be paid off and you’ll have $1,000 to contribute towards the new car’s balance. 
4. If the remaining balance of your car loan is more than the trade-in offer, this is called negative equity and you’ll still owe money on the vehicle. In this instance, you can either pay off the remainder in full before purchasing your next car, or the dealer may give you the option to roll over the balance into the new loan. 

What Entails “Rolling Over” a Loan?

If a Fort Dodge-area dealership proposes rolling over your loan, this means that they will pay off your old loan, no matter how much you owe. However, while the dealership is paying off the old loan upfront, this doesn’t mean that you’re no longer responsible for that balance. Instead, the price gets added to the new loan on the next car you purchase, meaning that you’ll have to pay the dealership back for both the old and new loan. 

Shop with Macke Motors, Inc. for Your Next Vehicle

Now that you know what is involved when trading in a financed car, if you’re ready to upgrade your Lake View commuter vehicle, turn to the automotive experts at Macke Motors, Inc. in Lake City to help you secure the keys. Whether you’d like to trade in a financed car for a lease, or have more automotive questions such as “can you lease a used car?”, contact us today. Be sure to check out more of our car buying tips to prepare for your next car purchase of any of our low mileage used cars, then apply for financing online to start the process!