Can You Trade In a Financed Car?

If you’re currently financing a vehicle that you’re not too fond of having as your Edina daily driver, you might be wondering, “Can you trade in a financed car?” Yes, you can trade in a financed car but know that the loan on your vehicle doesn’t disappear simply because you’ve traded it in. So if you plan on trading in a financed car in Minnetonka, you still need to find a way to pay off the remaining balance. Learn more about the ropes of trading in a financed car that still has a loan balance, then feel free to contact us at Morrie's Golden Valley Cadillac about trading in or any other related questions.

How Does Trading In a Financed Car Work?

Now that you’re aware of the fact that you have to pay off any remaining loan balances, how does trading in a financed car work? Here’s how”

1. Determine the remaining balance on your loan. You can find this information on your monthly statement.
2. Head on over to our trade-in estimate tool or another one like Kelley Blue Book to receive an estimate on the value of the vehicle you want to trade in. 
3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, you will have additional money left over that will go toward purchasing a new vehicle. 
1. For example, if you still owe $7,000 on your current vehicle, and you receive an offer for $8,000, the loan can be paid off and you’ll have $1000 to contribute towards your next car. 
4. On the other hand, if the remaining balance on your loan is more than the trade-in offer, you still owe money on the car. This is called being upside down on your loan, or negative equity. If this is the case, you’re better off paying the remainder in full before buying your next car. Or, you may have the option to roll the balance into your next auto loan. 

What Does “Rolling Over” A Loan Mean?

Rolling over a loan is when a dealership states they will pay off the remaining balance on your old loan regardless of what you owe, but there has to be a catch, right? Yep, as you would expect, there is a catch to rolling over a loan. When you roll over a loan, the remaining balance on your loan is applied to your new loan on the next car you purchase. It’s essentially combining your old loan with your new car loan.

Can You Trade-In a Financed Car for a Lease?

Maybe you’re tired of financing a vehicle, and you would rather lease your next vehicle than finance one. Can you trade in a financed car for a lease? Yes, you can, and it’s very similar to trading in a financed car for another one to finance. You’ll still get a trade-in estimate for the vehicle you want to trade in. Then, your vehicle’s trade-in value (assuming you’re not upside down on your loan) will be deducted from the initial deposit on your lease or future lease payments.

Trade-In Your Vehicle at Morrie's Golden Valley Cadillac!

Are you looking to swap out your current vehicle in exchange for a new Cadillac in Minneapolis? At Morrie's Golden Valley Cadillac, we make the trade-in process incredibly easy. If you’ve already found a vehicle that you can’t wait to make yours, apply for financing to get one step ahead in the car buying process, then contact us or give us a call at (866) 493-2819 to schedule your test drive at our dealership in Minneapolis.