How Does a Car Trade-in Work When You Owe Money on It?
Do you have an Acura near Highland Park that you are leasing, but you want to trade in before you have paid off the car? When you trade in your car that has a loan, the dealer will end up taking over the car’s loan and paying it off. The dealer should also take care of the paperwork that transfers the title, giving them legal ownership of the vehicle.
If Your Car Isn’t Paid Off
You’ll need to be prepared to bring the following items to the dealership if you want to trade in a car that isn’t paid off:
- Loan information such as the amount that is left to pay off in addition to the account number
- The vehicle’s registration
- Proof of insurance
- Your driver’s license
- A print out of your trade-in value based on a pricing guide
You’ll have a general idea on whether or not you’ll walk away with positive or negative equity for your new vehicle.
If Your Car Has Positive Equity
If your car is worth more than the amount of money that you have left to pay off, you can trade your car in and apply that money towards the purchase of your next car. For example, if you owe $3,000 on your car and it’s worth $5,000, then you will have an extra $2,000 to spend on your next car.
If Your Car Has Negative Equity
Your car may have negative equity if you owe more than your car is worth. If this is the case, you’ll be able to get a new loan to help make up for any payments that you owe.
Our Acura dealer near Highland Park knows that car loans can be confusing if you have never dealt with one before. Contact our team if you need more information!