Can You Trade In a Financed Car?

At Metro Honda, we offer flexible financing solutions to help drivers in the Bayonne and Newark area. One question we frequently hear around Hoboken is “Can you trade in a financed car?” The answer is yes, but there are some things to keep in mind.

• Your loan is not forgiven automatically.
• You will need to pay off the remaining balance of your loan.

However, trading in a financed car can be a great choice for many drivers. Find out whether or not you should trade in a financed car for lease or loan with car-buying tips from Metro Honda.

How Does Trading in a Financed Car Work?

Trading in a financed car requires a bit of number crunching. First, do you owe more money on the car than it is currently worth? Then the dealership will give you the money to pay off the remainder of the loan – but you’ll still have to pay that money off. For example, let’s say you owe $9,000 on your car and the dealership offers $10,000 for the vehicle. This transfers ownership to the dealership while paying off the loan. The remaining $1,000 will be subtracted from the price of the new vehicle you purchase.

What is “Rolling Over” a Loan?

“Rolling over” a loan refers to when the dealership pays off your old loan. This price will be added to the price of the new vehicle you purchase. So even though the dealership will pay off your old loan during the trade-in process, you will still have to pay the same amount that you were originally responsible for. But instead of paying the original lender, you will now pay the dealership.

Get Expert Financial Guidance at Metro Honda

We’ve given you the basics of how does trading-in a financed car works, but if you still have questions, feel free to contact us for more information. Our finance team is ready to help you through the process, so you can make the best choice for your needs and budget. We’re available via phone, text, chat, and email – so you don’t even need to make the trek to Jersey City to experience our customer care!