Can You Trade In a Financed Car?

Yes, you can trade in a financed car, but the balance of your loan doesn’t just disappear when you do so — it still has to be paid off. In most cases, the loan balance should be covered by the trade-in value of the vehicle, but that will depend on a variety of factors, including condition and age.

Trading in a financed car around Evergreen Park doesn’t have to be difficult, especially when you’re working with the Oak Lawn Toyota finance center — read on to learn more.

How Does Trading In a Financed Car Work?

1. Find out how much you owe on the loan of your financed vehicle; this information should be listed on your monthly payment statement.
2. Get an estimate of what your car is worth — you can use our Value Your Trade tool or other services like Kelley Blue Book. Bear in mind, though, that any online estimate will be just that: an estimate. The vehicle will have to be inspected in-person before you can get a firm offer.
3. If the trade-in offer exceeds the remaining value of your car loan, then the money that’s left over after paying off the loan balance can be applied toward the purchase of another new or used vehicle from the dealership.
   1. For example, if you still owe $4,000 on your car loan, and the dealership offers $7,000 for the vehicle, then you’ll have $3,000 leftover from selling your car that you can apply toward another vehicle purchase.
4. If the trade-in offer is less than your auto loan balance, you’ll still owe money on the vehicle — this situation is known as negative equity. You can either pay off the remaining loan amount before buying your next vehicle, or, in some cases, you may be able to roll over the balance into your next auto loan.

What Does “Rolling Over” A Loan Mean?

Rolling over a loan means that a dealership pays off the remaining balance of one loan and adds that amount to a new loan. This may be the best option if you trade in your vehicle, have negative equity, and purchase another car. Functionally, you’re paying off the previous auto loan at the same time that you’re making payments on the new one.

Trade In Your Car at Oak Lawn Toyota

If you’re looking to save money on your next vehicle purchase, trading in your car, truck, or SUV is a great way to do it. We’re happy to help drivers from Orland Park, Countryside, and throughout Chicagoland, whether you want to trade in a financed car for lease options or if you want to get another car loan. Contact us to get started!