Can You Trade In a Financed Car?

Trading a vehicle you already own is a great way to knock several thousand dollars off the sticker prices of the vehicle you want to buy. One of the common questions we get at Lexus of Clearwater about vehicle trade-ins is, “Can you trade in a financed car?” While the answer to that question is yes, it’s important to note that you’ll still be responsible for the remaining balance on your car loan. That’s why it’s vital that you know how much equity you have in your vehicle before making such a choice. Continue reading to learn more about trading in a financed car, and you can contact us if you still have questions after reading this short guide.

How Does Trading In a Financed Car Work?

The key to getting the most out of trading in a financed car is knowing how the process works and figuring out the best option for you. So, how does trading in a financed car work? The steps to follow are listed below:

1. Figure out how much you still owe on your car loan, which you can find listed on your monthly car note.

1. Get an appraisal and instant offer for your trade-in with our online estimate tool powered by Accutrade. Your vehicle’s worth will depend on factors such as its age, mileage, and vehicle report attached to its vehicle identification number (VIN). 

1. Weigh the remaining balance on your car loan against the dealership’s trade-in offer. If you owe more on your car than the dealership’s offer, all of the revenue from the sale will go to your vehicle lender, and you’ll also owe them the difference between your remaining balance and the sale amount. Now it’s decision time. However, if the trade-in offer is higher than the remaining balance on your car loan, you’ll get the difference between the trade-in offer and the remaining balance on the loan. In either situation, the lender must be paid before you can put any of the money from your trade-in toward a new vehicle.

You can even trade in a financed car for a lease, but the same principle applies as far as weighing the amount you owe on your car loan against the offer from the dealership for your trade-in.

Rely on Lexus of Clearwater for Your Next Vehicle

If you’re ready to trade in a financed car for a lease or buy something new to enhance your commutes around the Clearwater area, we’re here to help you start the process of getting into your new vehicle. You can apply for financing online and get approved for your next new vehicle in minutes, and as mentioned, you can get an appraisal and offer for your trade-in on our website, as well. Be sure to check out our lease and finance specials for a chance to save on your next Lexus!