Can You Trade In a Financed Car?

There is a good chance that you have a car loan and are wondering if trading in your current vehicle is an option. Yes! You can legally trade in a financed car. However, keep in mind that the loan doesn’t go away even if you trade in your car. You have to pay the remaining balance. You can learn more about trading in a financed car with our finance department. Apart from that, you can also contact us to learn tips about car loans, interest rates, leasing a car, selling a car, and more in Neptune Beach.

How Does Trading In a Financed Car Work? 

Trading in a financed car is a process similar to trading in any other vehicle. However, there are a few key differences. Here is how you trade in a financed car for a lease instead.

1. The first thing you need to do is check the remaining balance on your loan. It is given on your monthly statement.
2. Get an estimate of your current vehicle. It is simply an estimate, not an actual value. You will get the final quote once the vehicle has been physically inspected. 
3. Now, if you get more than what you have to pay for an auto loan, you will have money to invest in a new car.
4. For example, if you still owe $5,000 on your vehicle in Orange Park, and the dealer offers you $7,000, you can easily pay the loan and have an additional $2,000 to invest in a new car.
5. However, if your loan is more than what you are getting from trading off your car, then you have to pay additional money to the dealership in order to get a new car. This is called negative equity. You can either pay the remaining amount in full or use the option to roll over the balance in another loan.

What Does “Rolling Over” a Loan Mean?

Rolling over a loan is changing a current loan into a new one, usually at a lower interest rate. Depending on the interest rate, this may be a good move. A rollover is similar to refinancing. Rollovers are important because they can help you maximize savings as well as pay for your car at the same time. They are also a good way to trade in a financed car for a lease.

Rely on Honda of the Avenues for Your Next Vehicle

If you want to trade in a financed car and upgrade, check out our new vehicle specials in Jacksonville. We can help you with car buying tips to prepare for your next car purchase near St. Augustine. All you need to do is apply for financing online to get the funds you need to drive away with the vehicle you want.