Can You Trade In A Financed Car?

Sales person working with a customer in showroom

Yes—trading in a financed car is easy! Even if you still owe money on your current car, you can almost certainly trade it in for a new car in South Jersey, NJ or Mount Laurel, NJ. In what follows, we answer common questions to clarify the ins and outs of trading in a financed car, so you can move forward with confidence. Here’s an overview of what we’ll cover:

  • Why should you trade in a financed car?
  • How does trading in a financed car work?
  • Can you trade in a financed car for a lease?
  • How soon can you trade-in a financed car?

Why Should You Trade In a Financed Car?

Can you trade-in a financed car? As we’ve seen, the answer is yes—but should you? There are many reasons why you might need to trade in a financed car, including:

  • Your car’s fuel efficiency or upkeep are more than you can afford
  • You’ve added to your family and need a vehicle with more seating
  • You find a deal that’s better than what you’re currently paying
  • Your vehicle is worth more than what you owe on your loan

How Does Trading in a Financed Car Work?

There are a couple of scenarios you need to consider when deciding to trade in your financed car. For starters, the auto loan on your car is not forgiven: it will still need to be paid off. Of course, the money that you receive for your trade-in

  • If you owe more on your car than it’s worth in Philadelphia, PA, the dealership will give you enough to pay off the loan when they purchase your vehicle from you. This is called an “upside-down loan.”
  • When the dealership offers to pay off what you owe, regardless of the amount, it’s called “rolling over” a loan. The amount the dealership pays will be tacked onto the price of your new car.
  • If you’re upside-down on your loan and can afford to pay off the remaining balance without rolling it over, it’s usually a good idea to do so. You’ll end up paying less in interest over time.

Can You Trade In a Financed Car for a Lease?

While this isn’t always the best option, it’s worth considering trading your financed car for a leased car if you’re in an upside-down auto loan and you need something more affordable. The balance of your financed car can be figured into your lease deal. Interested in trying this the other way around? Buying out a lease is almost always easy, but only if you have the credit score needed to finance a car.

How Soon Can You Trade-In a Financed Car?

For drivers who want to go down this path, the question of when to trade in a financed car is one of the most important things to consider! Here’s what you’ll want to keep in mind:

  • Especially for drivers who buy new cars, depreciation can mean that your vehicle might be worth less than you owe for some time after you buy. It’s always a good idea to wait until your vehicle is worth more than your loan balance.
  • Making larger monthly payments can help to ensure that you don’t end up upside-down. That way, you can trade in your car whenever you wish!
  • Market conditions can have a significant impact on used car valuations. Keep an eye on how prices are fluctuating if you want to make sure that you’re getting a good deal!

Trade In Your Financed Car at Cadillac Of Turnersville

Whatever your reason, Cadillac Of Turnersville is happy to help you trade in your financed car. Our finance center will help find the best deal for you. Get a head start at home by filling out our trade-in form to value your current ride, and don’t forget to apply for financing. When you know what how much car your can afford, it’ll make the transition from a financed car to a new car so much easier.