Can You Trade in a Financed Car?

trade-couple-dealership

If you're still making payments on your vehicle and wondering if you can trade in a financed car, the answer is yes. Many drivers in Frankfort choose to trade in their financed vehicles when upgrading to something new-whether it's for better features, more space, or simply a change. At Lincoln of Lafayette, IN, our expert finance team is here to help you understand the process, evaluate your equity, and explore your options confidently.

Even if you're unsure about your current loan balance, we'll help clarify whether trading in a car you're financing is the right next step for you. 

Value Your Trade New Inventory

How Does Trading in a Financed Car Work?

Before you trade in a car you're financing, it's important to know how equity affects your situation. Here's a quick overview of how the process works:

  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 left over that will go towards purchasing a new car from the dealer. 
    1. For example, if you still owe $7,000 on your car in West Lafayette, 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?

Rolling over a loan is when a dealership says they will pay off your old loan no matter how much you owe. However, this is too good to be true, as the price gets added to your new loan on the next car you buy, meaning you pay the dealership back for the old loan at the same time that you pay off the loan on your new vehicle.

Learn More With the Finance Team at Lincoln of Lafayette, IN

So, can you trade in a car you're financing? Let our team guide you through your options. Whether you want to upgrade or simply change direction, we're here to help you make informed decisions. When you shop at Lincoln of Lafayette, IN, you'll gain access to:

Can you trade in a financed car? Yes-and we'll help you do it with confidence. Contact us today or visit our dealership to get started.