Can You Trade In a Financed Car?

sales person handing over car keys to customer

Of course! You can trade in a financed car, but you’ll want to keep in mind that the remaining amount on the loan doesn’t go away; you’ll still need to pay off the balance. Learn more about trading in a financed car with the finance team at Wolfchase Nissan. There are plenty of options available. In the meantime, contact us if you have any questions about car loans and interest rates, selling a car, leasing a car, credit scores, and more in Bartlett.

How Does Trading In a Financed Car Work?

  1. Determine the remaining balance on your loan. It is typically listed on your monthly statement.
  2. Use our Value Your Trade tool or one from a service like Kelley Blue Book to get an estimate on the value of your current vehicle. Note that this is simply an estimate, and it’s only once the vehicle has been physically inspected that the dealership will establish what the car is worth.
  3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, then you’ll have money leftover that will go towards purchasing a new car from the dealer. (Example: If you still owe $7,000 on your car in Memphis, and the dealer offers you $8,000 to buy the car, the loan can be paid off, and you’ll have $1000 to contribute towards your next car.)
  4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car — this is called “negative equity.” You can pay off the remainder in full before buying your next car, or you may have the option to roll over the balance into your next auto loan with the dealer.

What Does “Rolling Over” a Loan Mean?

When a dealership says they will pay off the old loan no matter how much you owe, it’s called a “rollover loan.” This, like many things that seem too good to be true, isn’t what it sounds like. With a rollover loan, the price of your old loan is simply added to the new loan on the next car you buy, meaning you pay back the dealership for the old loan at the same time as paying for the new loan.

Rely on Wolfchase Nissan for Your Next Vehicle

Ready to trade in a financed car for a lease or new loan? Check out our new vehicle inventory online, and then contact our team to get the process started. In the meantime, get in touch with our financing team to talk about your financial options, our new vehicle specials, and more!

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