Many times, car owners are hesitant to trade in a vehicle if they have not yet paid it off. However, it is more common than you think. Knowing the process, though, is what can make or break you financially. Determining if trading in a financed vehicle is the right choice depends on several factors, including the balance owed. We are here to offer you the best tips to ensure that trading in a car is hassle free, even if the vehicle is still financed. Instead of trading in your car, you can get more cash for cars in Dallas and the surrounding areas by contacting us today.
Factors to Consider When Trading in a Financed Vehicle
Trading in a financed vehicle is not as clear cut as it may seem. You have to consider the financial aspects to determine if it’s the right choice for you. For instance, trading in a financed vehicle may work to your advantage if the dealership offers you a fair value that is more than what you owe currently. However, the other side of the coin may not be as profitable for you.
Imagine this: You have $5,000 left on your loan when attempting to trade in a financed vehicle. The car dealership offers you $3,000 for your trade-in value when trading in a used car. The $2,000 difference either needs to be paid by you or it is wrapped into a new loan, which means you will be paying more interest on top of the price of the vehicle you want to purchase.
It’s also important, though, to think more about what your current vehicle is costing you. Are you due for costly scheduled maintenance or do you anticipate costly repairs that may cost you more than the value of the vehicle? If that’s the case, it may be time to trade in a financed vehicle.
Another upside to trading in a financed vehicle, even if you are slightly upside down, is to consider the incentives the dealership may be offering you. If you are able to get 0% interest rates or slightly higher, it may be more cost-efficient to trade in a financed vehicle rather than continue to pay for the upkeep of an older car.
Preparing to Trade In a Financed Vehicle
The process of trading in a financed vehicle can be complex if you are not prepared. Before heading to your local car dealership to trade in a used car that is still obligated under a car loan, do the following:
- Research: You will need to do some research before trading in a used car at a dealership. For instance, know the maintenance history, the mileage, the make and model and the value as estimated on web sites such as Edmunds or Kelley Blue Book.
- Determine the Value: While you may be able to pull up an estimated trade-in value for your used car for sale, you also need to consider the equity. For instance, if you determine that your car for sale is worth $10,000, you also need to account for the $8,000 you still owe. What this means is that you only have $2,000 in equity invested in this vehicle. If a car dealership does not offer you $10,000 or more when trading in a financed vehicle, your equity decreases.
- Scour the Contract: Hidden verbiage and policies within a contract at a car dealership can wreak havoc on you financially later on if you’re not careful. Scour the contract when trading in a financed vehicle to ensure that you know what you are agreeing to before you sign on the dotted line.
Don’t Trade It In One of the best alternatives to trading in a used car or trading in a financed vehicle is to NOT trade it in at a car dealership. Instead, consider the benefits of working with Don’t Trade It in. We are a nationwide, premier car-buying firm that prides itself on providing consumers with fair values for their used cars for sale. And, we can provide you with cash for cars up front to pay off your existing car loan. Whether you have a used truck for sale, a used Jeep for sale or a used minivan for sale, simply log onto our website, upload photos and vehicle information on our online form and our team will promptly get back to you with a fair-value offer for your used car for sale. We get it. It’s tempting to trade in a car at a local dealership, but in the long run, you’re probably going to lose more of your hard-earned cash. Let Don’t Trade It In indulge you with a fair value for your used car for sale that allows you to upgrade to a premium model, pay off some bills or take that vacation you’ve dreamed of taking.