Can You Trade in a Car That’s Not Paid Off?

There are many exciting Toyota models coming to the roads around Thomasville. So, it’s only natural you start to consider trading in a car you’re still making payments on. You’ll be happy to know that trading in a financed car is relatively simple, but know that your loan amount doesn’t go away. Don’t let your car loan hold you back and learn more about your trade-in options with the knowledgeable team at the Valdosta Toyota finance center. Don’t hesitate to reach out if you have any questions about car loans, interest rates, leasing a car, and more!

How Does Trading in a Financed Car Work?

Can you trade in a car that’s not paid off? Trading in a vehicle is a common way for drivers to finance their vehicle upgrades. Whether your vehicle performance isn’t keeping up with your daily Tallahassee commute or you’ve found a model that fits your style better, you can trade in a car. Simply follow these steps: 

1. Start by identifying how much you still owe on your car loan. Typically, this amount can be found on your monthly statement. 
   
   
2. Then, get an idea of how much your vehicle is worth using our Value Your Trade tool or a service like Kelley Blue Book. Keep in mind that these tools only give you an estimated trade-in value. Once you stop into a dealership, they’ll establish what the car is worth after a physical inspection. 
   
   
3. If it’s determined that the amount left on your auto loan is less than your trade-in value, you’re free to trade in a car you’re still making payments on. Any leftover money can be used towards the purchase of a new car at the dealership. 
   
   
4. When you still owe a balance on your auto loan after the trade-in offer is applied, this is called negative equity. While that doesn’t stop you from trading in a financed car, it does mean that you have to pay the remainder in full before purchasing a new car. Although, some dealerships offer to have that amount rolled over into your next car loan with the dealership. 

How Rolling Over a Car Loan Works

You can trade in a car that’s not paid off, but you may have to consider rolling over your car loan. Rolling over a loan at a Albany-area dealership means that the dealer takes over responsibility for the remainder of your old loan. However, that amount doesn’t go away. The price is added to the new loan for the next car you buy, allowing you to pay off the old loan along with the new one. 

Learn More Car Buying Tips with Valdosta Toyota!