Can You Trade in a Financed Car?

Car key & credit card on a signed contract


If you’ve got your eye on a new Chrysler, Jeep, Dodge, Ram model around Portland, you’ll be happy to know you can trade in a financed car! However, the balance of your loan doesn’t go away because you’ve traded it in. Read on with Dick Hannah RAM as we cover your options for how trading in a financed car works, even if the loan is more than the value of the vehicle. Reach out to the team in our finance department if you have questions about interest rates, buying and selling a car, or any other concerns about how to trade in a financed car for a lease.

Steps for Trading in a Financed Car

Whether you’re looking to increase your capabilities around Beaverton or just looking for a model that suits your style more, you’ll find that learning how you can trade in a financed car is a straightforward process. So, how does trading in a financed car work?

  • Start by determining how much is owed on your loan. You can find the current balance on your monthly statements.
  • Get an estimate of the current value of your vehicle by using our Value Your Trade tool or a service like Kelley Blue Book. Keep in mind this is only an estimate. Once you take your vehicle into the dealership, they’ll thoroughly inspect the condition to establish its worth.
  • In some cases, you’ll find that the remaining balance on your loan is less than the trade-in value of your vehicle. That means, when going to trade in your financed car for lease, that leftover money can go towards purchasing the new model you have your eye on. Take a look at this example: The balance on your car is $7,000, and the dealer offers you $8,000 on your trade-in. Once the loan is paid off, you’ll have $1,000 that you can easily apply towards your next car.
  • Sometimes when trading in a financed car, you may find that you owe more on your loan than what’s offered with your trade-in. This is called negative equity, but it doesn’t mean you’re out of luck. You can either pay off the full balance before buying your next car, or you have the option to roll over the balance into your next auto loan with a Hillsboro-area dealer.

Rolling Over A Loan

How does trading in a financed car work when you have a balance on your loan? The dealership can offer to roll over where they pay off your old loan, no matter how much you owe. Yet, this doesn’t mean you’re off the hook. The remaining balance of your old loan gets added to the new loan of the next car you purchase, and you’ll be paying back both loans at the same time.

Explore Financing Questions with Dick Hannah RAM!

If you’re still questioning, “how can you trade in a financed car?” Contact us at Dick Hannah RAM. Our knowledgeable team is ready to answer all your car buying questions, so you can get back of %%Di_City%% streets in a model you love. Be sure to take a look at our other tips like how to refinance a car loan, or comparing buying vs. leasing.

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