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Can You Trade in a Financed Car?

Handing over car keys

Can you trade in a financed car? The answer is yes! However, if the loan on your current vehicle is not completely paid off, you’ll have to pay off the balance; the loan doesn’t just disappear. If you’re still making payments on a vehicle that you’d like to trade in, read on to how trading in a financed car works at Mercedes-Benz of Warwick. Then, contact our finance department with questions about lease payments, rates, and prospective vehicle prices!

How Does Trading In a Financed Car Work?

You might know that most dealerships near Warwick and Cranston will not accept a trade-in without a title, so how does trading in a financed car work? As long as you bring us some information on your lender, we’ll contact them directly to obtain the title after the sale goes through. Beyond this point, trading in a financed car is a lot like trading in any other car. The only other major difference is that here, your payout will be based on the difference between your car’s value and your loan balance.

You can trade in a financed car, but should you? Even though today’s trade-ins are fetching excellent prices at our dealership, it might be worth holding off if your vehicle is currently worth less than what you owe. Here’s what you should consider before trading in a financed car:

  • Is the remainder of your loan less than the worth of the car? The dealer who buys your vehicle will give you enough credit to pay off the remaining amount of the loan. As an example, if you owe $8,000 on your vehicle and you’re offered $9,000 for it from the dealer, the loan can be paid off and the remaining $1,000 will be subtracted from the price of the new vehicle that you’re buying.
  • Is your loan balance currently higher than what your vehicle is worth? This means that you’re currently under water, as they say in the industry. You can still trade in a financed car for a lease or a new loan, but you’ll still have to pay off whatever remains of your initial loan. In most cases, we can help you roll the old balance onto your new plan.

If you’re ready to get started, take a moment to value your trade-in and find out how much you can expect to receive for your financed car!

What Does “Rolling Over” a Loan Mean?

Rolling over a loan is when the dealer says that they’ll pay your old loan off regardless of how much is left to pay. Again, however, this does not mean that the amount owed just disappears. The amount owed from your old loan will get added to the new loan on the next car you purchase. So, you’ll be paying the amount owed on your old loan when you pay your new loan on your new car. Still, for many drivers having one slightly higher monthly payment is better than having two!

Trading in a Financed Car for a Lease

Many Providence and East Greenwich drivers find that they desire quicker, more seamless upgrades—and trading in a financed car for a lease is one of the easiest ways to reach this goal! If you’re interested in learning more about the ins and outs of leasing, we encourage you to reach out to our financing department and speak with one of our team members. If you haven’t already, make sure to explore the benefits of leasing vs. buying to make sure that you’re going down the right path.

Visit Mercedes-Benz of Warwick Today!

Interested in trading in your current vehicle? After using our easy-to-use online car payment calculator, value your trade at our dealership! Additionally, if you have any questions, don’t hesitate to contact us!

Couple meeting with a finance advisor

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