Can You Trade-In a Financed Car?

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The answer is yes! It is possible to trade in a financed car, however, just remember that the loan on your vehicle isn’t taken care of by trading in the car. You are still responsible for the balance. Learn more about your options for trading in a car that still has a loan balance with Sterling Acura of Austin. Our finance team would also be glad to answer any questions about financing a car with no credit as well as car loans and interest rates, selling a car, leasing a car, credit scores, and more.

How Does Trading In a Financed Car Work?

  1. Find out what the remaining balance on your loan is currently. You should be able to find the amount on your monthly statement.
  2. Use our Value Your Trade tool to estimate on the value of your car. This is just a preliminary estimate. Your vehicle will have to be evaluated by an expert before you receive the actual trade in value.
  3. If the remaining amount of your auto loan is less than the trade in offer from the dealership, that leftover money can be applied toward the new car that you plan on purchasing.
    • For example, if you still owe $10,000 on your car in Buda, and the dealer offers you $12,000 to purchase the car, you are able to pay off the old loan and still have $2,000 left over that can be applied to what you owe on the new car you purchase.
  4. If the remaining balance of your auto loan is more than what you receive for your current car, you will still owe money on that loan. This is referred to as negative equity. You have the option of paying off the balance before you buy another car, or in some cases you could 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, this is too good to be true. What actually happens is that what’s left on the old loan is added to the price of the car that you are buying. This way, you are paying the dealership back for the previous loan as you are making payments on the car you just bought.

Turn to Sterling Acura of Austin for Your Next Vehicle

If you plan to trade in a financed car for lease or are looking to purchase a brand new car, remember to take a look at our new vehicle specials in Austin. You can even learn more about guaranteed car financing. Your dream car could be more affordable than you may think. Contact us with any questions or to set up a test drive.


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