How To Trade In A Financed Car: Step-By-Step Guide
Trading in a financed car may seem like a complicated process, but with the right information and tools, it can be a smooth and efficient experience. Whether you’re upgrading to a new vehicle or looking for a more affordable option, understanding how to handle your current loan and trade-in value is essential. This guide from Preston Ford of Denton will walk you through the process of trading in a financed car, including how to determine the value of your car, manage remaining loan balances, and work with our financing team to secure your next purchase. With these car-buying tips, you’ll be ready to make informed decisions for your next auto loan and vehicle selection. Visit Preston Ford of Denton to get started today!
How Does Trading In a Financed Car Work?
Trading in a car with a loan involves a few key steps. First, you need to know the remaining loan balance on your financed vehicle. This amount will play a major role in determining whether you have positive or negative equity. Once you have this figure, you can proceed to evaluate the car’s trade-in value using tools like Kelley Blue Book or our dealership’s online trade tool. We’ll then assess the value of your trade-in order to give you a fair and competitive offer for your current car.
If the trade-in value exceeds your remaining loan balance, you have positive equity, which can be applied toward your next vehicle purchase. If the remaining amount on the loan is higher than the car’s trade-in value, you’ll need to address this negative equity. For example, if your car’s trade-in value is $10,000 but you owe $12,000, you have $2,000 in negative equity. This situation can complicate the trade-in process because the remaining balance must be accounted for, either through a new loan or an upfront payment. On the other hand, positive equity means your car is worth more than the remaining loan balance. For instance, if your car is valued at $15,000 and you owe $10,000, you have $5,000 in positive equity. This amount can significantly reduce the cost of your next car or be applied as a down payment toward your next purchase, lowering your overall loan amount and monthly car payments.
When Is Trading In a Financed Car a Good Idea?
Trading in a financed car is a good idea when it aligns with your financial goals and vehicle needs. For example, if you have positive equity, trading in can help you secure a new car loan with better terms or lower monthly payments. It’s also beneficial if you’re looking to upgrade to a newer, more reliable vehicle or downsize to save on costs.
However, if you have negative equity, it’s essential to evaluate whether rolling over the remaining balance into your next auto loan is financially viable. In some cases, waiting until your car’s trade-in value increases or paying down the loan further may be a smarter move. Consulting with Preston Ford of Denton can help you determine the best course of action.
Can You Trade In a Car With Negative Equity?
Yes, you can trade in a car with negative equity, but it requires careful planning. Start by having your current vehicle appraised at our dealership and comparing the value to your remaining loan balance. If you find that you owe more than the car’s trade-in value, it’ll normally be applied to your next vehicle financing. But no need to stress, because Preston Ford of Denton often has trade-in offers and other dealer incentives to help you in this situation, and get you the deal you’re most comfortable with.
Our friendly finance department is here to guide you on how to structure your next auto loan and manage higher monthly payments. In some cases, it may make sense to pay off part or all of the negative equity up front to avoid carrying it into your next loan. Your decision will depend on your financial situation, interest rate options, and the terms of the new loan. Contact our finance department to learn more.
Maximizing the Value of Your Trade-In Offer
To get the best trade-in offer for your used vehicle, it’s important to prepare it properly. Start by using tools like Kelley Blue Book and our dealership’s trade tool to determine the value of your car based on its make, model, condition, and trim level. A well-maintained car with popular features and upgrades will typically fetch a higher trade-in value. Addressing minor repairs, cleaning the interior and exterior, and ensuring the car is in good working condition will also improve its trade-in value. Even small efforts, such as replacing worn tires or fixing cosmetic damage, can make a difference. These steps will not only make your car more appealing to dealers but also boost its perceived value.
What to Expect at the Dealership
When you visit Preston Ford of Denton, you’ll have the opportunity to explore a variety of new vehicles, used cars, and vehicle specials. From our comprehensive search tools that’ll help you find the ride that meets your preferences and budget to valuing your trade and scheduling service, we’ve got you covered. Our finance center will work with you to finalize your trade-in and arrange financing for your next car, while helping you understand your loan term and interest rate options. By discussing your needs with the finance team, you can ensure a smooth trade-in process and secure favorable terms for your next vehicle.
Essential Tips for Trading In Your Financed Car
Trading in a financed car doesn’t have to be overwhelming when you have the right approach. Start by assessing the value of your car and comparing it to your remaining loan balance. This will give you a clear picture of your financial position and help you make informed decisions. By preparing your car, exploring dealer offers, and consulting with our finance team at Preston Ford of Denton, you can maximize your trade-in value and make your next vehicle purchase a success. Visit us in Denton, MD, to get started today!
Connect with us
