If you do get an offer that can cover your loan balance, the dealership writes a check that gets sent to your auto lender to pay off the loan. The lender can thenremove the lien on the trade-in鈥檚 title, and the vehicle can be sold to the dealer. Remember: a financed car can鈥檛 be traded in or sold until the lien is removed from its title.
People also ask
Can you trade in a car with a loan?
Trading in a car with a loan is possible, but it can be costly depending on how much you owe. If your car is worth more than you owe on it, you may be able to use the difference toward the purchase price of a new vehicle. But if the opposite is true, you may want to pay down your loan before moving forward with a trade-in.
How does trading in a car work?
How trading in a car works When you trade in your car to a dealership, its value is subtracted from the price of the new car. When you trade in a car with a loan, the dealer takes over the loan and…
How do you pay off a trade-in for a new car?
Contact your lender to find out your payoff amount. If you have positive equity, you can use what the dealer offers you for your trade-in to pay off your existing loan and use any leftover money as a credit toward the new car purchase.
How do you calculate the value of a trade in car?
For example, if you owe $5,000 on your car, but the trade-in value is $6,000, that extra $1,000 can be factored in when negotiating a price on a new vehicle. Decide how much you want to spend for a new car, factoring in the outstanding balance on the old one.