How Does Trading in a Financed Car Work?

With the updates to styling and automotive technology, there’s bound to be a new model that catches your eye around Moultrie. If you’re found a model, you’ll be happy to know you can trade in a financed car for lease. However, keep in mind that although you can trade in your car, the remaining balance doesn’t go away. Read on with Valdosta Nissan to learn more about how trading in a financed car works, and if you have any questions about car loans, interest rates, selling a car, credit scores, and more, contact the team in our finance center today! 

Steps for Trading in a Financed Car for Lease

Luckily, if you’re wondering how trading in a financed car works, the process is relatively straightforward. Follow these steps for how to trade in your financed car for lease: 

1. The first step for trading in a financed car for lease is to know your standing. Figure out the remaining balance of your loan by looking at your latest monthly statement.
2. You can use a tool like our Value Your Trade tool or one from a service like Kelley Blue Book to find the estimated value of your vehicle. While this is only an estimate, it gives you a good idea of the value before it is physically inspected by the dealership. 
3. Sometimes, you’ll find that the remaining amount of your loan is less than the trade in offer for your current vehicle.That leftover money can help offset the cost of your new vehicle. 
4. For example, you may find that you owe $7,000 on your car in Thomasville, but the dealer offers you $8,000 to buy the car. This means that your loan will be paid off with $1000 remaining to put towards your next car.
5. On the other hand, you may find that you owe more on your auto loan than what you’ll receive for the value of your car, and this is called negative equity. From there, you have the option to pay off the remaining amount in full before trading in a financed car for lease, or some dealerships offer the option to roll over the balance into your next auto loan.

Consider “Rolling Over” A Loan

Just because you still owe money on your Hahira-area auto loan doesn’t mean you’re out of luck when learning how to trade in your financed car for lease. While you’re not absolved of the loan, the dealership can roll over the loan and agree to pay off the old loan, no matter how much you owe. Yet, while they take on the cost, the price gets added into your new loan for the next car you buy, and the dealership gets paid for the old loan at the same time as the new loan.

Explore Car Buying Tips with Valdosta Nissan!

Now that you know a bit more about how trading in a financed car works learn more about how car financing works. you’re ready to find the next car that’ll accompany you on your Valdosta adventures. We’re dedicated to taking the confusion out of the car buying process, so contact us at Valdosta Nissan if you have any questions along the way. If you’re debating between buying and leasing, compare the benefits of both with our guide.