Can You Trade In a Financed Car?

Trading in a financed car can be a very simple process, but you’ll still have to pay off the balance on your current loan. This could be a simple and easy process when it comes time for your upgrade, but the team at Springfield Mitsubishi - Reading gets into the details below. Learn more about how to trade in a financed car for a lease or new model when you have a remaining loan balance. The Mitsubishi finance center is here to help answer your questions, and is always available to chat about car loans and interest rates, selling a car, leasing a car, credit scores, and more in the Pottstown-area. 

How Does Trading In a Financed Car Work?

1. The first thing you need to do is determine the remaining balance on your current loan. This will be listed on your monthly statement or you can contact your lender for details.
2. Using our Value Your Trade tool or that of a service like Kelley Blue Book can give you an estimate on the value of your current vehicle. This is just an estimate, but it’s only when the vehicle is actually inspected that the dealership can determine the actual worth. 
3. If the amount remaining on your loan is less than the trade in offer from the dealership, then you will have left over money to put towards your next model. For example, if you still owe $6,000 on your vehicle, and the dealer offers you $8,000 to buy the car, the loan will be paid off, and you’ll have $2,000 to put towards your next car. 
4. In the case that the remaining balance of your loan is more than the trade in offer, you’ll be in negative equity. Meaning you’re still owing money on your car. In this case, you can either pay off the remainder prior to your next purchase, or rollover the balance on your next loan.

What Is “Rolling Over” A Loan?

When you roll over a loan, a dealership says they will pay off your old loan no matter how much you owe. In reality, that cost is put onto the loan of your next vehicle, so you pay the dealership back for the old loan at the same time that you pay off the loan on your new vehicle.

Trade in a Finance Car for a Lease

In the case that you want to trade in a financed car for a lease, you’ll still be responsible for paying off your car loan. Dealerships can often work this into your lease costs, similar to rolling over a loan on your Lancaster model. 

Can You Trade In a Financed Car in Reading?

When you are ready to trade in your financed car in Allentown, take the time to explore our new vehicle specials in Reading. Our team can provide additional car buying tips and suggestions for financing your next model whenever you are ready.