Can you Trade in a Financed Car?

If you’re wondering, ”Can you trade in a financed car?” will be pleased to know that you can! Trading in a financed car is an option to consider, however, keep in mind that the vehicle loan itself doesn’t go away; you still have to pay off the balance. Follow along with the finance center at Honda of Lincoln, we cover how trading a financed car works, and the options available for those that still have a balance on their Bellevue-area car loan. Contact us if you have questions about car financing, selling a car, trading in a financed car for lease, and more!

Trading In a Financed Car

How does trading in a financed car work? Keep these ideas in mind when visiting Omaha dealerships for a trade-in:

1. Find the remaining balance on the loan. This is typically located on the monthly statement. 
2. Get the estimated current value of the vehicle with the Value Your Trade tool or a service like Kelley Blue Book. Remember that this is only an estimate. The dealership will physically inspect the vehicle to determine what the car is worth. 
3. How trading in a financed car works is if drivers find that the amount on the loan is less than the trade in offer from the dealership, then that leftover money will go towards a new car purchase from the dealership. 
   1. Follow this example. If a Gretna driver owes $7,000 on the vehicle, but the dealer offers to pay $8,000 to buy the vehicle, then the loan will easily be paid off with a remaining $1,000 toward the next new vehicle.
4. Those who find the remaining balance of the auto loan to be more than the trade in offer experience what’s called negative equity. Money is still owed on the car, and drivers have to pay off that amount before trading in a financed car for a new vehicle. However, some dealers give drivers the option to roll over the balance of the loan with the dealer. 

If you’re still wondering how trading in a financed car works, contact us with any questions.

Rolling Over A Loan

Drivers can trade in a financed car if they still owe an amount on the loan by rolling over the loan. Dealerships can roll over the loan amount by offering to pay off the full amount of the old loan, however, the price is then carried to the new loan with the dealership. Meaning, while the old loan is settled, the new loan payments are contributing to the amount of the old loan and new loan at the same time. 

Explore Financing Options with Honda of Lincoln! 

Are you interested in trading in a financed car for a lease? Be sure to take advantage of the current Honda special offers available. Explore all your options by learning more about buying vs. leasing, and the other car buying tips you should know.