Can You Trade In a Financed Car?
There’s absolutely nothing stopping you from trading in a financed car, but you should know that doing so won’t necessarily absolve you of the responsibility to repay your loan! You’ll still be on the hook for the difference between the value of your trade-in and your remaining balance.
So, how does trading in a financed car work? Is it possible to trade-in a financed car for a lease? What are your options if the value of your trade-in doesn’t pay off the remainder of your loan? We’ll answer all these questions in detail below!
How Does Trading In a Financed Car Work?
Trading in a financed car is just like trading in any other sort of vehicle. You’ll just have a few more calculations to do along the way:
- Check your monthly loan statement to view the remaining balance on your loan.
- Take advantage of an online “Value Your Trade” tool to get an estimate of your vehicle’s true worth. While you’re at it, do some research online to find out what other owners around the greater Chattanooga area have received for similar vehicles.
- Bring your vehicle to a dealership that accepts trade-ins. After an in-person inspection, they’ll provide you with a final offer.
- Compare your offer to your remaining loan balance. If it’s more than you owe, congratulations! You have money that you can put towards your next car. If it’s less, talk to your lender about rolling the remaining balance over to your next loan, or pay it off and move on. If you use the Lexus credit card, you can also apply your points to your next purchase.
- Decide whether to accept or reject the offer. Negotiation is an option in some cases, but not all potential buyers will want to negotiate. Either way, the research you did ahead of time will come in handy here.
Remember, you don’t have to finance your next car if you don’t want to! Although used car leases aren’t particularly common, trading in a financed car for a lease is far from unheard of. And, since drivers who lease usually enjoy lower monthly payments, you might even be able to afford a nicer car!
What Does “Rolling Over” a Loan Mean?
If you owe more money on your loan than you can get for your trade-in, a lender may offer to roll your remaining loan balance over to your next financing package. That’s one way of saying that whatever you still owe will be added to the total amount of your next auto financing loan.
Rolling over your loan will allow you to make one slightly larger monthly payment, instead of having to worry about two payments at the same time.
Rely on Lexus of Chattanooga for Your Next Vehicle
Whether you’re looking to take advantage of our new Lexus finance deals or you want to end up with one of our used cars priced under $10,000, we want you to know that it’s easy to take the next steps at Lexus of Chattanooga. Get in touch with us today to find out how we can help you upgrade!
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