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Can You Trade In a Financed Car?

Excited Couple Reviewing Trade in Offer with Salesman
 

A commonly asked question our finance team at Washington Hyundai gets is “Can you trade in a financed car?” Definitely! While trading in a financed car doesn’t get rid of your outstanding loan, it is an ideal option for some Houston, PA drivers. For example, if you are trying to downgrade your car and loan to manage your finances better, trading in a financed car will make sense for you. Find out how trading in a financed car works below with Washington Hyundai if you’ve already decided this is the best option for you! 

 

 

The Process: How Does Trading In a Financed Car Work?

Now that you know the answer to “Can you trade in a financed car?” is an absolute yes, you might be wondering “How does trading in a financed car work?” While it involves a few more steps than the trade-in process of a vehicle with no outstanding balance, it is still relatively straightforward: 

  1. If you don’t know how much you still owe on your auto loan, find out now! You can usually find it in your monthly statement. 
  2. Then, get an estimated market value of your car with our trade-in value tool or one from a service like Kelley Blue Book. This is only an estimate and a more accurate one can be determined after an inspection. 
  3. Take your trade-in value offer and see if you have positive or negative equity. If your remaining loan is less than the trade-in offer, then you have positive equity or you will have money left after you trade in your car and pay off your loan. However, if you don’t, this means you have negative equity or you still have a part of your loan that you need to pay off after the trade-in. 
  4. Have negative equity? You will have several options, but most drivers in McMurray, PA often add the remaining balance to their next auto loan. 

“Rolling Over” A Loan 

Most drivers with negative equity proceed to “roll over” or move their outstanding balance of the old loan to a new loan. This means you will still need to pay off the loan you already have on top of the new one you’ve gotten. Because having more debt isn’t always ideal, Washington Hyundai recommends you to try to avoid trading in a car that still has a loan after accounting for the trade-in offer unless you absolutely need to and you are confident you can pay on time every month in the Eighty Four, PA area. 

Learn More About The Trade-In Process from Washington Hyundai 

If you’re curious if you can trade in a financed car for lease or you have any other questions about the trade-in process, feel free to contact us! Our finance experts are always happy to offer car buying advice, so you can feel confident when you are shopping for your next ride in Washington. If you decide that you are better off with paying off your current loan first, then you might be interested in seeing how you can pay it off early

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