Can You Trade In a Financed Car?

It is possible to trade in your financed car, but it’s important to remember that your loan does not go away because you’ve traded it in–you’re still obligated to pay off the balance. Keep reading to learn more about trading in a financed car that still has a loan balance. Then, reach out to our finance team for even more car buying tips!

How Does Trading In a Financed Car Work?

1. Check your monthly statement to find out how much you still owe on your auto loan.
2. Get an estimate of the value of your current vehicle by using our value your trade tool or one from Kelley Blue Book. Keep in mind that this is just an estimate, and only once your car is physically inspected at the dealership, you will get an official number.
3. If the remaining amount of your auto loan is less than the dealer’s trade-in offer, you’ll have money left over to put towards the new car.
1. For instance, if you owe $7,000 on your car in San Jose and the dealership offers you $8,000 to purchase the car, the loan can be paid off, and you’ll have $1,000 to put towards the next vehicle.
4. If your loan’s remaining balance is more than the trade-in offer, and you still owe money on the car, this is called negative equity. You can either pay off the remainder in full before buying your next car, or you may have the option to roll over the balance into your next auto loan.

What Does it Mean to “Roll Over” a Loan?

When a Santa Clara-area dealership rolls over your loan, this means that they will pay off your old loan no matter how much you owe. However, this price just gets added to the new loan, so you’ll be paying back the dealership for the loan while you’re also paying off the loan on your new vehicle.

Shop for Your Next Vehicle with Capitol Acura

If you’re ready to trade in your financed car, get in touch with Capitol Acura near Milpitas. Our team will help you decide whether rolling over your old loan into your new loan or paying off your existing loan in full is best for your finances. In the meantime, be sure to check out our new vehicle specials to score even greater savings on your next automobile.