Can you trade in a financed car?
Yes, you can. If you have positive equity on the car (as in it’s worth more than what you currently owe), you can trade it in easily. Many dealers will purchase the car, pay off the loan, and then put what’s left toward the new vehicle price, giving you a major advantage. If you have negative equity on the car (as in it’s worth less than what you currently owe), most dealers may still buy the car and pay off the loan. However, the difference will be rolled into your new car loan — meaning you’ll still need to pay it off eventually.
How soon can you trade in a financed car?
There’s no time limit that’s set in stone, but it’s a good idea to wait until you have positive equity. Now might especially be a good time with pre-owned car values at an all-time high.
What does it mean to be “upside-down” on a car loan?
Being “upside-down” on a car loan is the same thing as having negative equity. If, for example, you owe $30,000 on a car that’s worth $25,000, you have negative equity.
Can I trade in my current car for a more affordable one?
If you still owe money on your car, you can trade it in for a more inexpensive one. If, for example, you owe $15,000 and the car is worth $20,000, the dealer can purchase the car as a trade-in, pay off the loan, and put the $5,000 toward your new auto loan as equity. If you don’t owe money on the car and own it outright, there’s nothing stopping you from trading it in for a more affordable car. You can always
apply for financing or reach out to our team if you’re unsure about your options!
