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Using the vehicle you currently drive to help pay for a new vehicle is a great way to reduce your auto payments, avoid the hassle of selling your car, and help you afford an even better vehicle than you could with a cash down payment alone. Keep reading for answers to your questions on how trading in a car works and what you can do to get more when the time is right to upgrade your St. Louis commute.
When you trade in a vehicle, you’re essentially selling it to the dealership’s finance center and applying the money they pay you to the purchase price of your new vehicle. They’ll inspect your trade-in and, using sources like those available from NADA and Kelley Blue Book, make you an offer on your vehicle on the spot. You can get an idea of how large an offer you can expect with one of these popular car buying apps.
The money you receive for your trade will likely be less than you could get if you sold the vehicle yourself in Herculaneum, but because you’ll avoid dealing with buyers and have an instant decision, you may find it preferable to going it alone.
Trading in a car boils down to three main steps:
One question we’re often asked is, “How does trading in a financed car work?” If your car is worth more than what you owe on your auto loan, it’s smooth sailing. However, if you have negative equity (i.e. your car is worth less than what you owe), you may run into some difficulties.
Some dealers won’t accept cars if their owner still owes money. Those that do generally give you the option of a “rollover car loan.” This is when the dealer pays off the balance on your auto loan, then rolls over what they’ve paid off for you into a new car loan. So, either way, you’re expected to repay the balance on your old loan.
You can’t trade-in a leased vehicle for money, because it’s not yours to sell. However, if you’d like to trade-in your leased vehicle and end your lease contract early — you can. This can be a costly manuever, though. Chances are you’ll owe more than the car’s worth after short-term depreciation. Additionally, you’ll likely be charged an early termination fee. If you truly wish to end your lease early, it’s probably best to hang in there until you’ve got two or three months left.
Now that we’ve answered, “How does trading in a car work,” let’s discuss ways you can get more from the dealership at trade-in time:
By presenting a vehicle the dealership can turn around quickly, you’ll save them work, making it easier to demand more for your trade.
Now that you know the answer to the question, “How does trading in a car work,” we can help you move forward. We can also answer any related questions you may have, such as, “Can I trade-in a car I still owe on or a car with negative equity?” The best way to pay less on your next vehicle loan is to have your financing locked in before negotiations begin. Use the convenient finance application at Green Light Auto Credit and get the financing you need before you take that test drive near Florissant.