Can you trade a car in thats worth more than the car you want?

If your car is worth less than what you still owe, you have a negative equity car also known as being “upside-down” or “underwater” on your car loan. When trading in a car with negative equity, you'll have to pay the difference between the loan balance and the trade-in value.

What if my trade in is worth more than the car I want?

If your trade-in is financed and you have equity, the dealer will pay the remainder of the loan and subtract the equity from the price of the less expensive car. If the equity of your trade-in exceeds the price of the car your trading for, the dealer will cut you a check for the difference.

Can you trade in a car thats worth more?

If the trade-in value of your car is greater than the amount you owe, the dealer will deduct the equity from the price of the cheaper car. If you did not finance your new car, the dealer can put the entire value of your car toward the cheaper one you buy.

What happens if you trade your car in for a more expensive car?

If the trade-in value is less than what you owe on the vehicle, the lender will pay off the loan, but the remaining balance will get rolled into the new loan on the cheaper car.

Can you trade your car in for something cheaper?

A: If you still owe money on the car, you can trade it in for a cheaper one. If, for example, you owe $15,000 and the car is worth $20,000, the dealer can purchase the car as a trade-in, pay off the loan, and put the $5,000 toward your new auto loan as equity.

My Sneaky Trade In Tactic - Ex Car Salesman Tells All!-How To Trade In Your Car

How do you trade in a car that is not paid off?

When trading in a car with negative equity, you'll have to pay the difference between the loan balance and the trade-in value. You can pay it with cash, another loan or — and this isn't recommended — rolling what you owe into a new car loan.

Does trading in car affect credit?

Your car loan doesn't disappear if you trade in your car. However, the trade-in value of your car becomes credit towards your loan. This credit might cover the whole balance. If it doesn't, your dealer will roll over your loan, combining the deficit with the amount owing on your new car.

What if my car is worth more than I owe?

The Bottom Line

If your car's trade-in value is more than your current loan balance, then you're all set—you can just pay off the old loan and apply the difference toward the cost of your new vehicle. But if you owe more on your car than its trade-in value, then you'll have to make up the difference.

How long should you keep a car before trading it in?

If the vehicle is new, you should ideally wait until at least year three of ownership to trade it in to a dealership, as this is when depreciation normally slows down. If it's used, it already went through the big drop in depreciation and you can usually trade it in after a year or so.

How do you trade in a car with positive equity?

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.

What should you not say to a car salesman?

Will CarMax buy my car if I still owe money on it?

CarMax stores also accept cash and debit cards. If the amount you owe is less than $250, we will accept a personal check.

What do dealers use to determine trade value?

Factors that determine the value of your trade-in include the condition of the car, the demand for that particular make and model, and your skill at negotiating a price. The moment a new car leaves the lot, it begins to lose its value, known as depreciation.

How much do you lose trading in a new car?

It is best not to trade in your vehicle when you purchased it very recently. As soon as you drive a new vehicle off the lot, it loses around 10% of its value and up to 20% of its value within the first year.

Can you trade in a car and get cash back?

Your trade value is deducted from your new car's purchase price, not returned to you as cash. If you plan to finance, ask your dealer if you can receive actual cash instead of reducing your loan amount, but consider your loan's interest rate before doing so.

What are the pros and cons of trading in your car?

Is it smart to trade in a car with negative equity?

Dealers can sometimes recommend rolling the negative equity into your next car loan. This is very convenient, but it is not advised. It can immediately put you into negative equity on your new car loan. You are creating a larger loan amount with more interest.

Can I refinance my car if I owe more than its worth?

Refinancing Your Upside Down Auto Loan

If you have been suckered into a car loan in which you owe more money to the lender than the car you bought with the loan is worth, otherwise known as an upside down car loan, a good way to get yourself out of this hole is to refinance your upside down auto loan.

Is it better to put cash down or trade in a car?

Key Takeaways. When considering whether to make a down payment or trade-in a vehicle it's usually best to make a down payment from a financial perspective. You'll get more bang-for-your-buck when offering a down payment. This could mean selling your vehicle privately before going in for a purchase.

How long does it take for a trade in to be paid off?

Under California law, dealers must pay off your trade-in vehicle within 21 days from purchase. If the dealer fails to do so, you may have a claim against them. If your trade-in vehicle is not paid off, you may be liable for additional payments. If you do not make these payments, your credit may be affected.

How does it work when you trade in a car?

The process of trading in your car while you still owe money on it is simple and also a very common occurrence. When you trade in any vehicle the dealership will minus the value of your current vehicle off the price of the new one you wish to purchase.

Can you refinance a car loan then trade it in?

You can't refinance your car loan to get another vehicle. The entire point of refinancing is to get a better deal on your current car. Most often, borrowers do this to get a lower monthly auto loan payment. If refinancing isn't for you, there are still other paths to getting another vehicle.

Can I trade in my car after 3 months?

Can you trade your vehicle in after 3 months? The answer is yes, there is no rule that stipulates a specific time period after which you can or cannot trade your vehicle in, however, there are most certainly some practical considerations that need to be outlined.

What is a fair trade in value?

Your car's trade-in value is the estimated amount you can expect to receive from a dealer for your car. The fair market value is the value of your car if you were to buy it today.

Is Kelley Blue Book accurate?

For the most part, Kelley Blue Book (KBB) is one of the most accurate sources when it comes to prices for buying and selling used vehicles. Kelley Blue Book is a powerful resource. However, it is just one of multiple sources that folks use to help guide them in the car buying or selling process.