Can You Trade in a Financed Car?

financing a car

Absolutely! You can definitely trade in a financed car, however, you’ll want to keep in mind that trading in a car that is not fully paid off doesn’t make the loan payments go away. You will still be responsible for the balance. But how do you trade in a car that is not paid off? Learn more about trading in a car that isn’t paid off, car loan and interest rates, leasing a car, credit scores, comprehensive insurance, and more with Victory Mitsubishi. Our finance team is standing by to help you with your automotive needs, as well as help you learn how can you trade in a financed car, as well as how soon you can trade in a financed car.

How Does Trading In a Financed Car Work?

Wondering how trading in a car works? It isn’t too stressful. Simply follow the steps below.

  1. Find out what you still owe on the loan. That information should be available on the statement you receive each month.
  2. Use our Value Your Trade tool or one from a service like Kelley Blue Book to get an estimate on the value of your current vehicle. The figure you receive is only an estimate. The dealership will need to inspect the vehicle before giving you a final offer.
  3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, you can use that extra money to help pay for the new car you have selected.

For example, if you still owe $8,000 on your loan, but the dealer offers you $9,000 to purchase the car, you will be able to pay off the loan in full and have a bonus of $1,000 that can be used on the new car you’re purchasing.

If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car–this is called negative equity. You have the option of paying the remainder in full before you make your next vehicle purchase. Another choice is to roll over the balance into your next auto loan with the dealer. But how soon can you trade in a financed car? You can trade-in your vehicle at any time, but you may want to wait a year or more. Cars depreciate over time, and a brand-new vehicle can lose up to 20% of its value in the first year. This makes it easier to get negative equity.

What Does “Rolling Over” A Loan Mean?

Rolling over a loan is when a dealership says they will pay off your old loan no matter how much you owe, which is important to know about when you’re learning if you can trade in a financed car or not. This sounds too good to be true, right? It is. What this really means is that the remaining cost will be added to your new loan on the next vehicle you buy. So in the end, you’ll be paying the dealership back for the old loan while simultaneously paying off your new vehicle.

Find a New Vehicle at Victory Mitsubishi in Bronx!

Once you’re ready to trade in a financed car for a lease or when you’re ready to find a new vehicle to cruise around Westchester in, make the trip to Victory Mitsubishi. Apart from new vehicle specials and lease deals to make your new vehicle more affordable, we have a large inventory of new models to choose from, so you can get behind the wheel of the vehicle that’s best for your driving needs after trading in a financed car. Have questions in the meantime? Contact us! We can give you advice on whether repaying your car loan early is a good option for you and more at Victory Mitsubishi.

Victory Mitsubishi 40.8853426, -73.8287864.