How to Trade-in a Car With a Loan

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Can You Trade in a Car You Are Still Financing?

Can you trade in a car you’re still financing? Of course! The process will be very similar to that of financing with a traditional trade-in, just with a few notable differences.

When you trade in a vehicle you’ve paid off, that model’s value will be used to help cover the cost of your next purchase. The value of your current model will be built directly into your payment plan.

Since your model isn’t paid off yet, the same process will occur. However, you’ll have to determine if you have positive or negative equity.

If you have positive equity, your vehicle is currently worth more than what you owe. So, when you trade it in, that value will cover the remainder of your loan and you can finance your next vehicle.

On the other hand, you’ll have negative equity if your vehicle is worth less than the remainder of your loan. In this case, part of your loan will be covered by whatever your vehicle is worth, and the rest will be rolled over into your new financing plan.

Packaged all together, you’ll finish paying off whatever you owed on your trade-in and begin paying off your most recent purchase.

How to Trade Your Car

So, knowing that, there are a few things you can do before you’re ready to trade. You can start by looking into your car’s value and compare it against your loan’s balance to determine where your equity lands.

You can use our Value Your Trade tool for this stage of research and our payment calculator to start looking into potential payment options.

Wondering how soon you can trade in a financed car? You can trade in your car whenever is most convenient for you—whenever you’re ready! You can schedule an appointment with our team to get your vehicle appraised and to start building your payment plan.