Can I Trade In a Car I’m Still Financing?
If you’re thinking of trading in a financed vehicle to a dealership, there are some very important things to keep in mind to make the process as smooth as possible while minimizing your risk.
Before trading in a car you're financing
First, find out how much you still owe on the car and compare it to its current value. As discussed in a previous article: How Are Used Car Prices Determined, you’ll be able to get a rough estimate on your vehicle value for free using a number of methods and considerations.
If you owe more than the car is worth, you’ll have negative equity, meaning your loan balance is higher than the car’s value.
If that’s the case, you may have to pay the difference out of pocket or roll it into your new loan, which could make your monthly payments higher.
On the other hand, if your car is worth more than what you owe, you’ll have positive equity, which could help you negotiate a better trade-in deal or even a cash payout.
Before making any decisions, do your research, shop around for the best trade-in offers and get a feel for the value. Also, make sure to inform your lender of the trade-in, and make an effort to understand the terms of your new loan agreement.
Is negative equity really that bad?
When it comes to negative equity, it’s important to understand the potential consequences and drawbacks that come with it.
While negative equity isn’t always a deal-breaker, in many cases it can lead to a number of financial difficulties and obstacles.
Additionally, being “upside down” on a car loan can make it harder to purchase a new vehicle in the future. Furthermore, negative equity can affect your credit score, making it more difficult to get approved for loans or credit in the future.
So while there may be some situations in which negative equity isn’t a major issue, it’s generally best to avoid it whenever possible in order to maintain a sound financial footing.
Should I sell my car privately?
Selling your car privately can definitely have its benefits, such as getting a higher offer than you might receive from a dealership.
However, it can also be quite a bit of a hassle. The potential long wait time to find interested buyers, marketing effort, providing customer service, and there’s also handling all the paperwork involved.
That being said, it ultimately comes down to what works best for you and your specific situation. Have you considered using an online directory listing to help sell your car?
When is the best time to trade-in a car?
Everyone wants to get the most value out of their used car and the best way is to sell or trade in your car when its value is positive. It’s an excellent option to ensure you get a better deal.
With a little bit of research and timing, you can find the perfect time to make the trade-in happen.
Just mind your balance on the existing loan, the value of the vehicle, and the various factors that help determine the price of a used car. This way, you’ll be able to potentially save yourself money in the long run by trading in before major repair costs outweigh the car’s value.
Consider these factors and take action when the time is right, and make the most of your used car.
How soon can I trade-in a financed car?
There is no actual time limit on how soon you can trade in a financed car. Trading in a financed car is actually pretty common, and there is no need to stress over it. With a little bit of planning and preparation, you can strategize a timeline that is beneficial and works for you and your specific situation.
At Auto Excell we look at every situation constructively and to work to ensure a smooth transition to into a different vehicle. We are confident that we can find the perfect fit for you and make the process a positive experience.
Save on Used Cars
Feel free to call us and book your self a test drive 1-888-882-3692 or visit us at 1399 Dugald Road, Winnipeg, MB!
