Can You Trade In a Financed Car?

Finance Agreement

The short answer is yes! Trading in a financed car is relatively common in the Lynn area, but there are some important things to keep in mind. For one thing, you’re still on the hook to pay off the remaining balance after you trade the vehicle in. Luckily, the finance team at Honda North has outlined everything you need to know about trading in a financed car in the guide below, including the possibility of rolling over a loan. We also have some FAQs on our website about trading in your car.

How Does Trading In a Financed Car Work?

There are a few key steps to follow if you’re interested in trading in a financed car in Burlington, and some things to keep in mind regarding the remaining balance:

  1. See how much you still have to pay on your loan; you can usually find this on your monthly statement.
  2. Estimate the value of your current vehicle, using a third-party source like Kelley Blue Book. Keep in mind that this is an estimate, not a hard value.
  3. You have a few options depending on your remaining balance and your trade-in value. If the value of your car is greater than what you owe on it, then the dealership will give you the leftover money, which you can put towards a new vehicle!
  4. If the value of your car is less than the amount you owe, you’ll be in something called negative equity. This means that you’ll still have money to pay on your car after you trade it in, either to be paid off in full or to be rolled into your next loan. We have more information about rolling over a loan before.

What Does “Rolling Over” A Loan Mean?

If you’ve determined the value of your trade-in and found that you’re in negative equity, you usually have the option of rolling over the loan. This means that the dealership will pay off the remaining balance by applying it to the loan on your next vehicle. You won’t have to pay off the balance on the trade-in, but you’ll have a greater amount to pay off on your next vehicle because you’ll essentially be paying off two loans.

Trade in a Financed Car For Lease at Honda North

If you want to trade in a financed car for lease, or if you have any questions about financing, you can reach out to our office for more information! Feel free to stop by our dealership near Lawrence if you’d like to speak to an expert in person. You can also check out our new vehicle specials if you want to save on your next Honda!

 

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