How to Trade in a Car With a Loan
You’re ready to give your Pensacola, Crestview, and Fort Walton Beach, FL, travels an upgrade with a new set of wheels—the only thing standing between you and your new ride is that you’re still financing your current ride.
We at World Ford Pensacola are happy to let you know it’s possible to trade in a financed car. To help you learn how this is possible, we’ve created this guide on how to trade in a car with a loan. Keep reading to see the simple process!
Can You Trade in a Car You Are Still Financing?
Yes! You can trade in a car you’re still financing. This makes it possible to easily upgrade your commute.
One of the biggest things to consider when trading in a car that’s still being financed is what type of equity it has—either positive or negative. Equity is the difference between your vehicle’s trade-in amount and the remaining balance on your car loan.
- Positive Equity: If your car’s trade-in amount is greater than loan balance, your car has a positive equity. No additional steps are required.
- Negative Equity: If your car’s trade-in amount is less than the loan balance, your car has a negative equity. When this occurs, you’re responsible for paying the remaining difference.
If after using a trade-in tool you determine you have a negative equity on your car, you have a few options on how to proceed.
Incorporate the Equity into Car Payments
When trading in your car, you can incorporate this balance into your new car payments. The balance will be distributed among your new loan.
Pay the Balance Upfront
If you don’t want to pay the balance of your old car loan with your new one, you have the option of paying the remaining balance upfront. This can help keep your new car payments lower than if you incorporated the equity into your new payments.
Wait Until There’s a Positive Equity
Don’t want the other options? You can always hold off on trading in your current car until you have a positive equity.
How Soon Can You Trade in a Financed Car?
You can trade in your financed car at any time. Although, experts recommend waiting at least a year before trading in. That way, you give your vehicle time for the depreciation value to slow down.
Depreciation is the amount of value lost over the lifespan of a vehicle. The highest depreciation—at around 20%—occurs within the first year. After that, this depreciation rate slows down.
How to Trade in a Car with a Loan
Ready to trade in car you owe money on? Follow these simple steps to upgrade your commute in no time:
- Choose your new ride
- Research your vehicle’s trade-in amount
- Gather the necessary materials
- Visit the dealership to finalize the trade-in
Once at our finance center, our team will walk you through the trade-in process.
Make sure you bring the necessary materials with you to trade in, such as proof of insurance, your license, the vehicle registration, and more. Contact our finance center for a full list of necessary materials.
Trade in Your Car Today!
Ready to upgrade your Pensacola, Crestview, and Fort Walton Beach, Florida, travels by trading in your car? When you visit our finance center, we’re eager to help get you behind the wheel of your dream car, even if your current ride still has a loan.
What are you waiting for? Visit us at World Ford Pensacola to trade in your car today!
