Can You Trade In a Financed Car?

Woman handing over car keys

It is most definitely possible to trade in a financed car; just remember that doing so does not automatically wipe out the remainder of any auto loan against which you’re still making payments. Wall Township buyers can even trade in a financed car for a leased vehicle! DCH Ford of Eatontown has all the details—so read on for the full story, or contact us in the meantime if any additional questions crop up as you read our guide to trading in your financed vehicle. 



How Does Trading In a Financed Car Work?

There are four main steps to trading in your vehicle that has an outstanding lien balance. Here are the details you should know about the process:

  1. Figure out the outstanding balance on your loan. It can usually be found listed on your monthly statement.
  2. 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. Remember: this is just an estimate, and it’s only once the vehicle has been physically inspected that the dealership will establish what the car is worth. 
  3. If the remaining amount of your car loan is less than the trade-in offer from the dealership, then you’ll have money leftover that you can put toward the purchase (or lease) of a new vehicle: 
    1. For instance, if you still owe $7,000 on your car in Tinton Falls, and the dealer offers you $8,000 to buy the car, the loan can be fully paid off and you’ll have $1000 to contribute towards your next car. 
  4. If the remaining balance of your auto loan is greater than your trade-in offer, then you’ll still owe money on your car (you will, in other words, have negative equity). In this case, 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 (you’ll have to talk to us here at DCH Ford of Eatontown, or your dealership, to figure out your choices).

What Does “Rolling Over” A Loan Mean?

Rolling over a car loan occurs when the dealer at which you trade in your vehicle says they’ll pay off the remainder of your old loan when you trade in your financed vehicle. Normally, what really happens is they add on the equivalent amount to your new loan, thus “rolling it over”.

Trade In Your Next Vehicle at DCH Ford of Eatontown!

The finance experts here at DCH Ford of Eatontown are happy to help you with all of your automotive finance and lease-related questions, so give us a call now at 732-649-1637. Meanwhile, apply for financing to get a head start on taking the new Ford of your dreams home to Red Bank.


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