For those wondering if you can trade in a financed car, the answer is a resounding yes! But keep in mind that the loan on your vehicle doesn’t go away because you’ve traded it in; you have to pay off the balance. If you’re looking to learn more about your options for trading in a car that still has a loan balance, get in touch with the finance center at Power Mazda, your local Mazda retailer.

HOW DOES TRADING IN A FINANCED CAR WORK?

1. Determine the remaining balance on your loan. It is typically listed on your monthly statement. You can always check in with your lender to get the correct balance.
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.

For example, if you still owe $7,000 on your car in Wilsonville, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1000 to contribute towards your next car.

1. 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 DOES “ROLLING OVER” A LOAN MEAN?

Rolling over a loan is when a dealership says they will pay off your old loan no matter how much you owe. However, like most things that sound too good to be true, it’s truly not as good as it sounds. The price will get added to your new loan on the next car you buy, meaning you’ll be paying the dealership back for the old loan at the same time you’re paying off the new loan.

RELY ON POWER MAZDA FOR YOUR NEXT MAZDA

Need help with your credit score? We have some tips! Whether you have general finance questions or are curious about how the lease buyout process works, we can help. And when you’re ready to trade in a financed car for lease or get behind the wheel of a new Mazda, be sure to check out our new vehicle specials at Power Mazda. Contact us today to learn find more financing tips or with any questions in the meantime.