Can You Trade in a Financed Car?

2022 Jeep Compass Driving on Street


The kinds of questions we get at Tacoma Dodge Chrysler Jeep Ram often pertain to auto financing, because let’s face it, car finance solutions have many facets, some of which can be confusing. One question we field all the time is “Can you trade in a financed car?” The answer is a big “Yes!” Trading in a financed car is sometimes thought of as a difficult or complex task, but the reality is much less scary than many people think. Learn more about your options for trading in a car that still has a loan balance with your local authorized Dodge, Chrysler, Jeep, Ram finance center, and contact us if you have any questions about car loans and interest rates. 



How Does Trading In a Financed Car Work?

Whether you want to trade in a financed car for lease or a new purchased vehicle, the process is fairly similar in Spanaway and Lakewood. Here’s what to expect:

  1. Figure out the remaining balance on your current car loan. It is usually listed on your monthly statement.
  2. Use our Value Your Trade tool. Remember, this is simply an estimate, and it’s only once the vehicle has been physically inspected that you’ll get a trade-in offer. Looking to get cash for your car faster? Our KBB Instant Cash Offer tool can help.
  3. If the remaining amount of your auto loan is less than the trade-in offer from the dealership, then you will have surplus funds to buy your next vehicle. 
    1. For example, if you still owe $5,000 on your car in Lakewood, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $3,000 to contribute towards your next new Chrysler, Dodge, RAM, or Jeep.
  4. If the remaining balance of your auto loan is more than the trade in offer, then you’ll owe money still, or have what’s called “negative equity.” You can either pay this off in full before trading in or ask the dealer to roll over your old loan.

What Does “Rolling Over” a Loan Mean?

Rolling over a loan is when a dealership offers to pay of your old vehicle for cash, thus satisfying any old lien requirements and qualifying you to buy a new vehicle with fresh financing. What generally happens is that a dealership will pay off the old loan so you’re in the clear, but then tack that same amount (plus interest) onto your next vehicle loan or lease payments.

Rely on Tacoma Dodge Chrysler Jeep Ram for Your Car Finance Needs

Ready to learn all there is to know about buying a car in or around Gig Harbor? The experts at Tacoma Dodge Chrysler Jeep Ram can help. After having valued your trade online, we invite you to explore our other online shopping tools, such as our finance payment calculator and online finance application.

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