Can You Trade in a Financed Car?

salesman passing over new car key
A common question we hear at Barnes Crossing Volkswagen is, “Can you trade in a financed car?” The answer to this question is absolutely yes! Trading in a financed car is possible — but remember that trading in your vehicle does not cancel your responsibility to pay back the remaining loan.  At Barnes Crossing Volkswagen, we strive to simplify the financing process for drivers in Starkville and Oxford. That is why we have provided a guide to trading in a financed car below.

How Does Trading in a Financed Car Work?

How does trading in a financed car work? Barnes Crossing Volkswagen explains below:

  1. Take a look at your monthly statement to find the balance that remains on your loan.
  2. Find the current value of your vehicle using our online tool. Keep in mind that the amount given is only an estimate. Your vehicle will need to be inspected in person at the dealership before a final offer is given.
  3. If the balance remaining on your auto loan is less than the amount of the trade in offer, the money that is leftover can be put toward the cost of your next vehicle.
    1. Example: If you still owe $5,000 on your loan, but the vehicle is currently worth $10,000, that remaining $5,000 from the dealership’s offer can help cover some of the cost of your next vehicle.
  4. If the remaining balance of your auto loan is more than the trade in offer that you are given, this is called negative equity. It means that you still owe money on your car, and you can pay off the remainder in full before making your next vehicle purchase or roll over the balance into your next auto loan.

Rolling Over a Loan

What does it mean to “roll over” a loan? When you roll over a loan, the dealership pays off your old loan despite what is still owed. This does not mean you are no longer responsible for the balance, as the price gets added to your new loan on the next car you buy. While you are paying off the loan on your new vehicle, you are also paying off the remaining balance on your previous vehicle.

Barnes Crossing Volkswagen Makes Financing Hassle-Free

No matter if you’re looking to trade in a financed car for lease or you are looking to purchase a brand new Volkswagen, you can expect a stress-free financing process at Barnes Crossing Volkswagen. Here, you can feel confident that you are getting a fair Volkswagen trade-in deal and competitive prices on all of your favorite VW models. Contact us today for more information about liability insurance, to explore our used VW inventory, to learn about the benefits of electric cars, or stop by in person. We are just a short drive from West Point.

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3973 North Gloster Street • Tupelo, MS 38804

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Barnes Crossing Volkswagen 34.3123216, -88.707911.