Can You Trade In a Financed Car?

Man Signing Car Lease

You sure can trade in a financed car near Middletown! Just remember that the loan on the car you trade won’t go away — you have to pay off the balance, but there are several ways to do so. Just as the finance department at Old Saybrook Chrysler Dodge Jeep RAM helped you learn how to trade in a car, they’re here to help you learn all about trading in a financed car.

How Does Trading In a Financed Car Work?

The main difference in trading in a financed car in New London compared to trading in a car you own outright involves taking care of the outstanding auto loan. Here’s how it works:

  1. Know the remaining balance on your loan, which should be on your most recent 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. This estimate will give you an idea of how much you’ll get, but you won’t know the exact value until it’s inspected at the dealership.
  3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, then you’ll have money left over that will go towards purchasing a new car from the dealer. For example, if you owe $7,000 on your loan but the dealer offers you $8,000 for it, you’ll have $1,000 to put towards your new car.
  4. If you owe more than your trade-in is worth, it’s called “negative equity.” You can pay off the remainder in full before buying your new car, or you might have the option to add the balance to your new loan. This is called “rolling over.”

What Does “Rolling Over” A Loan Mean?

When you roll over a loan, it means the lender for your new auto loan will add what you owe from your old auto loan to the new one. Obviously, this isn’t ideal, because you’re essentially going to be paying for two cars at the same time. But in the event that purchasing a new car is necessary — if your family has outgrown your vehicle, for example — a roll over loan might be necessary.

Rely on Old Saybrook Chrysler Dodge Jeep RAM for Your Next Vehicle

Whether you’ve paid off your current vehicle or not, but need a new car, check the excellent inventory at Old Saybrook Chrysler Dodge Jeep RAM, then apply for financing with our finance department. No matter your financial situation, we’re here to help with your questions about used vehicles and insurance, and more!

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255 Middlesex Tpke • Old Saybrook, CT 06475

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Old Saybrook Chrysler Dodge Jeep RAM 41.3069593, -72.3825927.