For Normal drivers interested in an upgrade to a new car, the question, “Can you trade in a financed car?” is a common one. While there are a number of things you should keep in mind when you’re trading in a financed car, the easy answer is: yes. you can trade in a financed car. Most importantly, the current car loan on your Morton vehicle will need to be paid off in full. Read on with the Sam Leman Toyota Bloomington experts for how to trade in a financed car for lease or purchase and more financing tips.
How Does Trading in a Financed Car Work?
Answering “Can you trade in a financed car” is simple enough, and the process itself is not that complicated, either. First, you’ll want to value your trade-in. This will help you understand how it stacks up against the remaining amount you owe on your loan, which will determine how much more finalizing on the paperwork you may face. Your trade-in value is figured through a number of factors including:
- Mileage is a key factor, as this is a good baseline for the amount of wear a vehicle has sustained
- The vehicle’s age, as an older vehicle with less mileage, may indicate having set idle for long periods of time
- Regularly scheduled maintenance records and any history of repairs, accidents, and the types of parts used if applicable
- An inspection from a technician will reveal any further condition
So, how does trading in a financed car work? To illustrate: if you owe $7,000 on your Toyota, and your dealership offers $9,000 to buy it, the loan will be paid off. The car ownership will be transferred to the dealership, and the remaining sum of $2,000 will then be deducted from the price of your new ride. If you want to trade in a financed car for lease, this is the best option, as “rolling over” a loan into a lease is rare.
“Rolling Over” A Loan
If a dealership agrees to pay off the remainder of your old loan, this is called “rolling over” a loan, there are a few things to keep in mind. The price you will encounter for your next loan, in this case, will include the remainder of your old loan, and you will owe the value to a new lender through your dealership. Knowing if the answer to “Can you trade in a financed car?” typically relies more on whether Springfield drivers want to consider “rolling over” their loan in this way.
If you are trading in a financed car and happen to owe $7,000 on your previous auto loan, and the dealership offers you $5,000 for your trade-in, they may offer to “rollover” the remaining loan balance. This means that an extra $2,000 will be tacked on to the next auto loan you take out, and you’ll pay it off over the course of your regular payments. To trade in a financed car for a lease in this way is unlikely, though it’s best to consult your finance specialists to consider all your options.
Your Financing Experts at Sam Leman Toyota Bloomington
With the answer to “How does trading in a financed car work?” under our belts, explore how financing works for our drivers, or whether you prefer the freedom of ownership in our guide for buying vs. leasing. Our experts are standing by to help you in any step of your upgrade, so contact us today to get started!