Can You Trade In a Financed Car?

Can you trade in a financed car? That’s a question we hear quite frequently in the finance department at Lexus of Tampa Bay from our Tampa customers who are looking for a new vehicle even though they’re still paying the note on a vehicle they financed. The answer is a resounding yes, but it’s important to know how trading a financed car works to get the most out of your trade-in. Continue reading as we break down the ins and outs of trading in a financed car, and you can reach out to us with any questions or to schedule an appraisal for your used car. 

How Does Trading In a Financed Car Work?

So, how does trading in a financed car work? The first step in the process is to figure out how much you still owe on your current loan, which you can find on your most recent billing statement. The next step is to use a tool like the certified offer tool on our website to get an estimate of your vehicle’s value. You won’t get an official offer for your vehicle until we’re able to assess it in person at the dealership, but the estimate you receive online should be reliable for a ballpark estimate.

Now that you know how much you still owe on your vehicle and how much trade-in value it has, it’s decision time. If the trade-in value of your vehicle is greater than your remaining auto loan balance, you’ll receive the difference, which you can put towards the lease or financing of a new vehicle. If you owe more than the vehicle is worth, you’ll have what’s called negative equity, meaning the sale of your vehicle won’t cover the amount you owe, so you’ll still have to make payments to the lender. However, some dealerships may be willing to roll over your remaining balance on your current vehicle into your new car loan. It works the same way if you want to trade in a financed car for a lease.

Rolling over a loan is when your current auto loan is added to your new loan, and you pay the lender for your new car for both loans simultaneously. 

Rely on Lexus of Tampa Bay for Your Next Vehicle

Now that you know how trading in a financed car works, if you’re ready to trade in your vehicle for a new Lexus, you can get a certified offer for your used vehicle on our website in minutes. You can also apply for financing online and get approved for a new Lexus in a matter of minutes.