Can You Trade in a Financed Car?

Thinking of trading in your current vehicle but still have a loan taken out? Wondering if trading in a financed car at a dealership like Sunshine Chevrolet, LLC is possible? The answer is – yes! You can absolutely trade in a financed car, however, you’re still responsible for paying off the balance even if you’ve traded it in. Find out more about your vehicle trade-in options with our finance experts below and don’t hesitate to contact us online if you have any lingering questions about credit scores, selling a car, or taking out car loans! 

How Does Trading in a Financed Car Work?

1. Calculate Current Loan Balance: Determine the remaining balance on your loan. It is typically listed on your monthly statement.
2. Get an Estimate on Your Vehicle: 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. Note that this is simply an estimate, and it’s only once the vehicle has been physically inspected that the dealership will establish what the car is worth. 
3. Determine Whether You Have Leftover Money: If the remaining amount of your auto loan is less than the trade-in offer from the dealership, then you’ll have money left over that will go towards purchasing a new car from the dealer. For example, if you still owe $7,000 on your car in Hendersonville, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1000 to contribute towards your next car. 
4. Take Care of Negative Equity, If Necessary: 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 can 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 with the dealer.

“Rolling Over” a Loan

Rolling over a loan refers to the act of a dealership offering to pay off your old loan despite the amount owed to the bank, financial institution, etc. However, it’s important to keep in mind that the price gets added to your new loan on your next vehicle purchase, meaning you pay the dealership back for the former loan while simultaneously having to pay off the loan on your current vehicle. 

Finance Your Next Vehicle at Sunshine Chevrolet, LLC!

Ready to trade in a financed car for a lease or get behind the wheel of a new Chevrolet car? Just make sure to take a look at our new vehicle specials here to save yourself money on your upcoming purchase! We also highly recommend checking out our car buying tips to make sure you’re as informed about the vehicle purchasing process as possible before you virtually apply for financing!