Can You Trade in a Financed Car?

Man and Woman Signing Contract

Can you trade in a financed car if you haven’t paid it off yet? Yes! We help Waco drivers do it all the time. How does trading in a financed car work? Can you trade in a financed car for a lease? The fact is, you have multiple options and our finance department makes the whole trade-in process as simple as possible. So, we’ve put together this easy-to-follow guide below for your convenience. 



How Does Trading in a Financed Car Work?

Trading in a financed car is very easy if you owe less than what it’s worth. For instance, say you owe $4,000 on your old car, but it is worth $5,000. We’ll take your trade, pay off your loan, and apply the $1,000 of equity you have in your old car toward the down payment on your new car. But what if you’re upside down on your loan? Can you trade in a financed car if you owe more than what it’s worth? 

Can You Trade in a Financed Car if Its Value is Less Than What You Owe?

Some Waco drivers may find themselves in a situation where their car is not worth as much as they owe on it. This doesn’t happen as much as it used to, due to the high demand for used cars, but it still happens. How does trading in a financed car work in that case? You can either pay off the loan before you buy the new car or the new lender may agree to pay off your loan and roll the negative equity toward your new loan. For instance, let’s say your situation is reversed from the scenario we presented above: you owe $5,000 on your old car, but it’s only worth $4,000. You’ll either pay the $1,000 difference to the dealer, or the dealer will add $1,000 to your new loan.

Can You Trade in a Financed Car for a Lease?

A lot of our Aransas Pass customers have decided they’d rather lease their next car instead of buy. But, what if you still owe money on your current car? Can you trade in a financed car for a lease? Yes! It works similarly to financing, in that positive equity is applied to your down payment, while negative equity would be rolled onto your lease, increasing your payments.

Bring Your Trade to Allen Samuels Auto Group

We would love the chance to make a good offer on your trade-in. We’ve helped numerous customers to move on to their next vehicles, and we’d like to help you, too. So bring your trade-in and let us take a look at it. We make it so simple that you can learn the value of your trade before you even leave your house. In the meantime, you might want to check out our guide on how to trade in a car. We have several convenient locations, like our one near Hutchinson. Drop by or contact us today!


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