If you're excited about getting a new car but haven't completely paid off your old one, there's no need to stress! This is a frequent situation, and I'm here to help you through it.
You can trade in your old vehicle even if you still have an outstanding balance. It's a common scenario for car enthusiasts and most dealerships to manage. In fact, it's so typical that you shouldn't be surprised if a dealership doesn't bat an eye when you mention that you still owe money on your current car. You can skip the trouble of paying off your car loan and waiting for the title before you begin your search for a new model.
So, how does it work? It's really straightforward.
After you trade in your car, our dealership collaborates with your bank or financial institution to pay off the loan on your behalf. We find out from the lender who provided your car loan what the current payoff amount is, so we can settle your loan and close it within 10 days. This means you typically won't even need to call your bank to let them know you're selling your car; the dealership will handle all the details.
When the dealership takes over the car and communicates with your lending institution, we obtain the title. The car then becomes ours to sell, whether to a retail customer or, more commonly, at a wholesale auction to another dealer.
Just because you're trading in your used car doesn't mean you're free from any financial obligation on it. While you certainly don't have to keep making payments on a car you no longer possess, if you're in a situation where you owe more than the car's worth, the dealership will roll that negative equity into the payment for your new vehicle. That amount doesn't just disappear; instead, you'll be paying it off as you settle your new car loan.
Feel free to come by if you have a loan on a vehicle you're considering trading in, and together we can discover the ideal new vehicle for you. I'm also here to assist you in figuring out whether taking on new debt for another vehicle before settling your old one is the best decision for you.
