Can You Trade in a Financed Car?

Car dealer giving car key to buyer

 

It is entirely possible to trade in a financed car! Unfortunately, doing so does not automatically mean you can stop making payments. You can still default on your car loan even after it’s traded in, and doing so will adversely impact your creditworthiness. Sometimes, car dealerships will pay off your loan and roll it into your new car loan, though, if you’re purchasing a new vehicle from them. Contact us at Harvest Honda Yakima today to inquire about how we can help you trade in your financed vehicle!

 

 

How Does Trading in a Financed Car Work?

How does trading in a financed car work, exactly? The process of trading in a financed car for a new leased or purchased vehicle is pretty simple. In most cases, this is what you need to do:

  1. Confirm the outstanding balance on your loan. It is often listed on your monthly loan statement.
  2. Use our online trade-in valuator tool or a service like Kelley Blue Book to get an estimate of the current value of your vehicle. Remember, what you get is just an estimate, and it’s only once the vehicle has been physically inspected & evaluated that the dealership will establish what the car is worth. 
  3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, then you’ll have money leftover that will go toward purchasing a new car from the dealer. 
  4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car. You will, in other words, have negativeequity to pay off. 

What Does “Rolling Over” a Loan Mean?

When a dealership pays off the remainder of your current loan when you trade in your financed car, that is what “rolling over” a loan means. Because the dealership still needs to profit from the sale, they will almost never pay off your loan without rolling the amount into a new loan. For this reason, trading in a financed car with negative equity is not usually the best financial decision. Still, for some Ellensburg and Sunnyside car shoppers, it’s worth the loss to get behind the wheel of something new.

Rely on Harvest Honda Yakima for Your Next Vehicle

Ready to trade in your vehicle for a new Honda near Wenatchee? Harvest Honda Yakima can help! Specifically, our Honda-trained finance experts can answer all your questions about car loans and leases. Ready to see if you have positive or negative equity on your financed car by comparing your trade-in value with your outstanding loan balance? Value your trade online now!

 

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