Is it bad to trade in a vehicle you still owe on?

Yes, you can trade in a financed car, but the balance of your loan doesn’t just disappear when you do so — it still has to be paid off. In most cases, the loan balance should be covered by the trade-in value of the vehicle, but that will depend on a variety of factors, including condition and age.

Can you trade in a financed car that is not paid off?

Yes, it’s possible. If you’re considering trading in a car that is not paid off, you’re in one of two situations: the car is worth more than the amount you owe on your loan (positive equity) or the car is worth less than what’s owed (negative equity).

Should I tell the dealer how much I owe on my trade?

Don’t tell a car dealer about your trade-in Fundamentally, says Bill, “dealerships like to move money around. So it probably also is not in the buyer’s best interest to mention right up front that he or she has a car they want to trade in.

How long after buying a car can I trade in?

If the vehicle is new, you should ideally wait until at least year three of ownership to trade it in to a dealership, as this is when depreciation normally slows down. If it’s used, it already went through the big drop in depreciation and you can usually trade it in after a year or so.

Will CarMax buy my car if I am upside down on the loan?

Yes, CarMax will buy your car even without you buying any car from them. So, to sell your upside-down car to CarMax, you’ll have to write them a check for the difference. CarMax will then pay off your loan.

What do dealers check on trade ins?

He must determine what it will cost the dealer to get your vehicle ready and available for sale on the lot. That means he must determine a value for your car and then subtract money for any discrepancies, cracked windshield, torn leather, detail, tires, alignment, etc.

Why do car salesmen ask if you have a trade in?

It may tell the dealer that you’re desperate to get out of the vehicle and into the next one. They may take notice and not be as flexible on the next car’s selling price because they may see that you’re in a rush. A dealership that notices you’re desperate to get out of the vehicle may give you a lower offer.

What happens if I owe money on the vehicle I want to trade in?

If your auto loan payoff amount is more than the dealer is willing to give you for your trade-in then you will still have to pay off what you owe on your old vehicle even if you trade it in.

How does trading in a car with a loan work?

How trading in a car works When you trade in your car to a dealership, its value is subtracted from the price of the new car. When you trade in a car with a loan, the dealer takes over the loan and…

How does a trade in work when you still owe?

Now, you’re responsible for the $2,000 difference, which can throw a wrench into the trade-in process. The difference between what your vehicle is worth and how much you owe on it is known as equity.

Do you need a down payment to trade in a car?

In addition to any equity applied to the new car purchase, you can make a down payment to reduce the overall balance of the loan. But you’ll need to provide financing — cash or an auto loan — for the remaining purchase price of the car. The value of the trade-in will be listed in the contract for your new car.