Are you in the market for a new car, but you haven’t paid off your old car yet? Then you might have questions: Can you trade in a financed car? How does trading in a financed car work? Can you trade in a financed car for a lease? Don’t worry. Our friendly Finance Department has helped several Port Huron customers just like you with the intricacies of trading in a financed car. So, let’s answer your questions.
Trading in a financed car is easy if your car is worth more than you still owe on it. Let’s say you owe $3,000 on your old car, but it is worth $4,000. The new lender will pay off your old loan and apply the remaining $1,000 towards your down payment for your new car. How does trading in a financed car work if you owe more than what it’s worth?
Can you trade in a financed car when you owe more than it’s worth? Yes, but it may or may not make financial sense for you. How does trading in a financed car work in that case? Either you pay the difference between what you owe and what the car is worth, or the dealer will take over your loan, but roll your negative equity into the loan on your new car. So, for example, you owe $4,000 on your old car but it’s only worth $3,000. You either pay the $1,000 difference to the dealer, or the dealer will add $1,000 to your new loan.
Yes, you can trade in a financed car for a lease. In this case, the dealer takes over your loan and applies your positive equity to the down payment on the lease. But how does it work if you owe more than what the car is worth? Much the same way as if you were buying the new car. You can either pay the difference upfront or the dealer will add your negative equity to the amount of the lease, resulting in higher monthly payments.
You have questions. We have answers. So, contact us, we’ll be happy to help. We aim to make it easy for you to get into your next car. You can even apply for financing online. We’re just a short drive away from Marysville, you can explore our entire inventory of new and used cars from the comfort of your home.