When you're financing a vehicle, there may come a time when you feel ready to trade it in. Maybe you want a newer model, or you're just not happy with your vehicle's performance. But when can you trade it in if you're financing it? Can you trade it in? These are the questions we hope to answer in this short guide to trading in a financed vehicle. Let our experts at INFINITI of Tallahassee guide you in your vehicle journey with our impressive inventory of new and used vehicles.
When Can I Trade In a Financed Car?
A financed vehicle is a tradable asset, and, depending on how much you still owe on the vehicle, you might even be able to trade it in for some extra cash. The circumstances of your trade-in depend largely on the vehicle's value, how much you still owe, the price of the vehicle you want to trade it for, and the dealership's specific policies. Typically, you can trade in a financed car at any time during the terms of the loan, unless specifically prohibited by the lender.
How Do You Trade In A Financed Car?
If you want to trade in a financed car, there are some steps to follow to make sure you're paying off the original loan and still getting the new vehicle you want. To start, you may want to determine your vehicle's value. You can do this by using online tools or by taking your car to a licensed dealer. Bring your vehicle into one of our certified salespeople, and we'll give you a quick, accurate quote so you know exactly what you're working with. When you determine your vehicle's value, you want to understand the equity you have.
Positive Vehicle Equity
Positive equity in a vehicle occurs when the vehicle is worth more than you still owe on the loan. This means you can potentially sell or trade in the vehicle, pay off the loan, and still have some extra money to work with. For example, let's say you have a vehicle that's worth $20,000, and you only owe $12,000 on it. You can trade it in for closer to $20,000, depending on the dealer, and still have some extra money to upgrade your ride.
Negative Equity
Negative equity occurs when a vehicle is worth less than what you owe. For example, if you financed a used vehicle worth $15,000, it's likely you won't get $15,000 for it when you trade it in. Let's say this same vehicle is worth only $8,000 when you trade it in, but you still owe $12,000 on it. This is an example of negative equity, and while negative equity doesn't typically mean you can't trade in a vehicle, it may affect the value of the vehicle you can trade it for or the terms of the new loan.
Rolling Over a Loan
In some cases, you can "roll over" an old loan into a new one when you do a trade-in. This occurs when you trade in a vehicle that has negative equity, allowing borrowers to still get a new ride while repaying the rest of the old loan. The dealership pays off the remaining balance for the borrower, rolling over the balance into the new loan. So, you'll get a new vehicle, but you'll still have to pay off the old amount in addition to the new balance.
Compare Trade-In Offers
You may get different offers from dealerships or even private buyers. Once you understand the value of your trade, you can know what to expect in terms of offers. Consider each offer carefully, and, of course, the vehicle you want to trade for. Research the typical price for both used and new options for that vehicle model, or contact your local dealership for a summary of their inventory. You can schedule an appointment with us to learn about your trade-in options and get an accurate offer for your trade-in.
Research Your Replacement Vehicle
You can't complete a trade-in if you don't know what you're looking for, so check out your local dealerships for the hottest trade-in vehicles and offers. Some dealerships offer more for trade-ins than they would for a cash sale, so check with local inventory to find the right ride for your needs. INFINITI of Tallahassee has a huge selection of new vehicles to suit every type of need and budget. Visit our website to browse our selection and get a trade-in offer.
Accept An Offer or Sell Your Vehicle
If you get a good trade-in offer, you can close out the process by accepting that offer and trading your vehicle for a new one. Alternatively, you might choose to sell your vehicle to a private buyer, which gives you cash to work with. You can use that cash as a down payment for a new vehicle or lease, or even to finance a different vehicle. When you accept a trade-in offer, you'll need to fill out some paperwork, especially if you still owe money on the loan.
The dealership can guide you through the process and provide all the necessary paperwork, so you don't have to worry about understanding this step entirely. If you don't understand any part of the terms or the documents you're signing, be sure to ask questions. It's crucial to understand what you're signing before you commit your name in ink because once you do that, you're committed to the terms outlined in the deal.
Now that you understand the trade-in process, you're ready to move to the first step. We at INFINITI of Tallahassee are happy to help guide you through the process, so call us today or book an appointment to speak to one of our certified sales representatives. You're always in expert hands at Kraft, and you won't find service of the same caliber anywhere in the Tallahassee area.
