Trade In A Car Your Financing

Trade in a car that is still under an existing loan or financing plan can be a complex process. It involves settling the current loan on the trade in vehicle and rolling over any remaining balance owed into the financing on the new car purchase. This allows the positive equity from the trade-in to help lower the financing amount needed for the new vehicle.

Can You Trade in a Financed Car?

Trading in a car that still has a loan or financing on it can definitely be done. The current loan must be paid off as part of the transaction. Most car dealerships will work with the financing company to pay off the remaining balance. This amount will then be rolled into the financing on the new car purchase. It is a straightforward process as long as you understand how it works. Working with your dealership is key to having a seamless transaction.

What the dealer will do is give you a payoff amount for the loan on your trade-in. That amount will be deducted from the total for your new car with the remainder becoming your new loan amount. Be sure to discuss any potential upside down situations on the trade with the dealership before finalizing the deal. With the right equity trading in a financed car is very doable.

What Does it Mean to Roll Over A Loan?

When you trade in a car that is not yet paid off the remaining amount owed on that vehicle gets rolled over into the new auto loan for the replacement car. The dealership pays off the old loan using funds from the new loan on your behalf. So the balance transfers over to the new loan instead of being completely paid off. This allows you to transfer any existing negative or positive equity to the new vehicle purchase.

Rolling over the loan is usually the best financial option if you owe more on the trade than it is worth. It prevents you from owing money separately. The new loan amount includes the payoff for the trade as well as taxes fees and the cost of the replacement car. Be sure to understand the full costs involved before agreeing to roll over any amount.

Can I Trade in a Car I’m Still Paying Off?

Yes it is possible to trade in a vehicle that you have not yet finished paying off. When you trade in a car that still has a loan balance that amount must be paid to satisfy the old loan. The dealership will typically work directly with your lender to get the payoff amount.

They will then deduct the payoff from the amount credited to you for the trade-in vehicle. If you owe more than the vehicle is worth the difference can be rolled into the new loan. Be aware that rollover amounts usually incur interest charges. As long as you understand the full financial process and paperwork trading with an existing loan can be straightforward.

What are the Risks of Trading in a Car with a Loan?

What are the Risks of Trading in a Car with a Loan?

There are a few potential risks involved when trading in a car that still has a loan balance. One is being upside-down which means you owe more than the vehicle’s current value. This leaves you with negative equity that must be included in the new loan. Larger loan amounts mean higher monthly payments.

You also run the risk of a gap between the payoff amount from your lender and what the dealership is offering as credit for the trade. If they don’t match you may have to pay more out of pocket. And by extending your loan term you pay more interest over the life of the new loan. Carefully consider whether rolling over debt is the right financial choice.

How Do I Trade in a Car with a Loan?

Trading in a car when you still owe is a multi-step process. First get the payoff amount from your lender. Then work with the dealer to get an appraisal quote for your trade. The dealer will handle paying off your loan once you’ve selected a new car.

They’ll deduct the payoff amount from what they’re giving as credit. You’ll sign paperwork for the new loan which will include any remaining balance. Many dealers can organize this transaction seamlessly. When taking delivery of the new car make sure your old loan is fully paid to avoid issues down the road. Proper documentation is key to a smooth process.

Is it a Good Idea to Trade in a Car with a Loan?

Whether trading in a car with a loan is advisable depends very much on your individual financial circumstances. If you have positive equity in the trade where you owe less than it’s worth then it can make sense since you lower the loan amount.  if you’re upside down then it increases your debt obligation.

Carefully weigh factors like additional interest costs higher monthly payments and increased loan terms. Consider alternatives too like selling private party to get more for your vehicle. If done right with eyes wide open to the full costs trading with a loan balance can work for some. But it isn’t always the most cost effective decision in the long run.

When to Avoid Trading in a Car with a Loan?

There are definitely times when it’s better to avoid rolling existing auto debt into a new vehicle purchase. One is if you are significantly upside down on the trade. Adding thousands in negative equity means owing much more overall.

Another red flag is having little to no equity at all. In that case you’re not gaining any real financial benefit from the trade. It’s best to wait until you get closer to paying off the loan. You should also avoid it if the new payments exceed what you can comfortably afford monthly. A test drive of the full driving costs is smart.

Trading with a loan is riskier the more you plan to do it sequentially. Each rollover buries you deeper in long term debt. If possible it’s usually better to fully pay off one auto loan before taking on the debt of another vehicle.

I Want to Get Rid of My Car What Other Options do I Have?

I Want to Get Rid of My Car What Other Options do I Have?

If you want to be rid of your car but are still making payments consider alternatives to trading it in. You could look to sell it privately where you’ll likely get a higher price than from a dealer. Just be sure the new owner understands they must pay off any remaining loan balance.

Another option is donating the car to charity if it qualifies. Many organizations offer tax deductions for donated vehicles. You’ll want to fully research organizations first. As a last resort some lenders may allow you to voluntarily surrender the car if you are desperate but it will damage your credit. Having it repossessed should always be avoided as it harms your report even more. Planning ahead is best.

Car Shopping Secrets

One of the most important secrets to successful car shopping is doing your research ahead of time. Determine what make and model you want along with optional features. Know similar vehicles standard equipment so you can compare apples to apples. Check pricing guides like Kelley Blue Book to see what a fair price looks like.

Arming yourself with information levels the playing field against salespeople who want to use tricks to get you spending more. Another tactic is negotiating separate prices for the vehicle and any extras you may buy. Never feel rushed through the process either. Take time to consider your options both at home and between dealers. Patience and preparation are key to getting the best deal.

Learn More About Vehicle Financing at Ford of Latham

At Ford of Latham we can help you understand all of your options for vehicle financing including trading in a car you still owe money on. Our experienced representatives make the process easy by handling payoffs rolling over any balances and more. We offer low interest consumer financing through top tier lenders with flexible terms to choose from.

We also provide complimentary GAP insurance quotes to review potential downsides. Our priority is being upfront about costs and risks so customers can make intelligent financial choices. Stop by our showroom to speak personally with a financial specialist or even apply for pre approval online. Ford of Latham is here as your one stop resource for navigating auto loans of any kind.

More from Ford of Latham

In addition to making vehicle financing transparent Ford of Latham aims to bring honesty and integrity to every customer interaction. Our award winning sales consultants and technicians are industry trained professionals who share our values of quality service. When you purchase or service a vehicle with us you can rest assured you’re being cared for at every step.

We also offer ongoing promotions and deals throughout the year to make driving an American made Ford an affordable choice. Explore our current inventory at anytime or give us a call   we’re always happy to answer any questions Our mission is complete customer satisfaction both now and over the long haul.

Your one-stop shop for comparing car loans

Making an informed decision about auto financing starts with comparing rates and terms from multiple lenders. Our loan calculator allows you to do just that to find the most cost effective option. Simply enter your details and we’ll pull quotes to show payment estimates from both local and nationwide banks and credit unions.

It usually only takes a few minutes to receive customized offers allowing you to evaluate features like interest charges, payoff lengths and potential discounts. We even factor in average APR rate changes monthly so you know if today presents a particularly affordable opportunity. Use our comparison tool to your advantage in finding the right car loan for your needs and budget.

Trade in Your Used Car at Humble Hyundai

Looking to upgrade your ride and want the best value for your trade? Bring it into Humble Hyundai where you’ll receive top dollar owed or not. We work with many lenders to seamlessly pay off your existing loan leaving only positive equity or a minimized amount rolled into your new purchase.

We also offer enhanced appraisals and Hyundai’s complimentary Car Cash option if your trade qualifies both which further boost its value in the deal. Our priority is making the transition easy and leaving you with affordable monthly payments. Stop in today for a no obligation estimate on your vehicle and to learn more about special offers. You can even shop our expansive inventory online before visiting our convenient showroom.

Trading in a Car with a Loan: Everything You Need to Know

If you’re ready for an automotive change but still making payments trading may’s a process that requires understanding. Speak to your lender for accurate payoff details in advance so the dealership knows costs. Get trade in estimates from multiple shops not just online for the best possible credit.

Most transactions can roll over negative equity but interest is charged extending costs. Consider private sale if possible or keep driving if not near payoff to avoid these added charges. Don’t forget taxes and fees on the new purchase too. Make sure your trade mileage and condition meet agreements too to avoid issues down the road. With preparation trading a loaned car can work out but it isn’t always the most financially savvy choice long term.Thorough research is key.


What Happens If Your Engine is Blown but you Still Owe Money? 

If your engine blows and you still owe on the loan you are still responsible for paying off the remaining balance.

Should I Pay Off my Auto Loan Early? 

Paying off your auto loan early can help you save on interest costs over the full term of the loan.

Can I Refinance my Car Loan? 

It may be possible to refinance your existing car loan to get a lower interest rate and more favorable terms.

Can you Swap Finance from one Car to Another in Ireland? 

In Ireland you can transfer your auto financing from one vehicle to another as long as the lender approves rolling over the existing loan balance.


Trading in a car that still has existing financing requires understanding the full process. When trading a car with a loan it is important to evaluate factors such as payoff amounts equity levels and how rolling over any balance affects new loan terms and costs. By working closely with your vehicle dealership and lender any issues when trading in a car with your current financing can be avoided to make the transaction smooth.

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