How Does Trading In a Financed Car Work?

Signing Finance Documents for Car

The answer is yes! Trading in a financed car with a dealer like Jack Powell Chrysler Dodge Jeep Ram is an easy process, but it doesn’t mean your current loan goes away. You’ll still have to pay off the balance, but it’s not as daunting as you may think. Follow along with Jack Powell Chrysler Dodge Jeep Ram as we discuss how to trade in a financed car that has a loan balance on it, and how our local finance team can help. Have a question? Contact us directly and we’ll be happy to help you!

How Does Trading In a Financed Car Work?

Now that you know that you can trade in a financed car with your local San Diego dealership, you may be wondering, “How does trading in a financed car work?” The process itself is easy when you work with one of our finance professionals, but there are some things you should consider before you begin the process. Read below to see how trading in a financed car works: 

  1. Find out the remaining balance on your current auto loan. This will be listed on your monthly statement or you can contact your lender. 
  2. Use the Value Your Trade tool on our website or a service like Kelley Blue Book to find an estimate on the value of your current vehicle. Keep in mind that this is an estimate, and not the final value of your vehicle. The final value will be determined by the dealership when you bring your car in for inspection. 
  3. If the remaining amount of your loan is less than the trade-in offer from the dealership you can use the money leftover to purchase a new car from the dealer. 
    1. As an example, if you still owe $5,000 on your car and the dealer offers you $7,000, the remainder of your loan can be paid off and you’ll have $2,000 to contribute towards your next car. 
  4. If the remainder on your loan is more than the trade-in offer from the dealership, then you’ll still owe money on your vehicle. This is called negative equity. You can either pay off the remainder in full before buying your next car, or you can roll over the balance on to your new auto loan with the dealer. 

What is “Rolling Over” a Loan?

If you decide to “roll over” a loan with your local Carlsbad dealership, then you’re agreeing to add the price of your old loan onto the next car you buy. In essence, you’ll be paying the dealership back for your old loan at the same time you’re paying off the new loan. Not all San Marcos dealerships offer this service though, so if you plan on rolling over a loan you should check with the dealership beforehand. 

Get a New CDJR Vehicle from Jack Powell Chrysler Dodge Jeep Ram!

When you’re ready to trade in a financed car for a lease or a new auto loan, come to Jack Powell Chrysler Dodge Jeep Ram in Escondido, San Diego! You can explore our new vehicle inventory and browse our new vehicle specials to save money on your next purchase. You can also read more of our car buying tips to learn about the car buying vs leasing process, as well as what good mileage on a used car is. We look forward to hearing from you!

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