Can You Trade In a Financed Car?

Has a new Honda model caught your eye, but you currently have a vehicle you’re financing from a Red Bank dealership? Then, you may be wondering if you can trade in a financed car. The answer is yes! However, keep in mind that the loan on your vehicle won’t go away just because you’re traded it in. Learn more about your options for trading in a financed car with DCH Kay Honda below, then read our other tips for more information on your vehicle financing options or the car buying process. 

How Does Trading In a Financed Car Work?

Now that you know you can trade in a financed car at DCH Kay Honda, you’re probably wondering how the process works. Read the steps below to see how trading in a financed car works at a local Freehold dealership. 

1. Determine the remaining balance on your loan. It is typically listed on your monthly statement.
2. Use our Value Your Trade tool or one from a service like Kelley Blue Book to get an estimate on the value of your current vehicle. Note that this is simply an estimate, and it’s only once the vehicle has been physically inspected that the dealership will establish what the car is worth. 
3. If the remaining amount of your auto loan is less than the trade in offer from the dealership, then you’ll have money leftover that will go towards purchasing a new car from the dealer. 
   1. For example, if you still owe $10,000 on your car in Tinton Falls, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $2000 to contribute towards your next car. 
4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car – this is called negative equity. You can pay off the remainder in full before buying your next car, or you may have the option to roll over the balance into your next auto loan with the dealer.

What is “Rolling Over” A Loan?

The term “rolling over” a loan means a dealership will pay off your old loan no matter how much you owe. However, the price of your old loan is added onto the next vehicle you buy. This means that you’ll be paying the dealership back for the old loan at the same time you pay off the loan on your new vehicle. 

Buy Your Next Vehicle at DCH Kay Honda

Now that you know how you can trade in a financed car, visit our Eatontown dealership to browse our new and used vehicle models and trade in your financed car. You can also sit down with our finance team to go over your financing options. Visit us today to get behind the wheel of a new Honda model!

Value Your Trade