Can You Trade-In a Financed Car?

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Can you trade in a financed car? How does trading in a financed car work? Can you trade in a financed car for a lease? You have questions. We have answers. Our friendly finance department has helped many Freehold customers just like you to understand the process of trading in a financed car. Learn more with our expert finance team below.


How Does Trading in a Financed Car Work?

You’re in really good shape if you’re in the enviable position of owing less on your car than what it is worth. For instance, suppose you owe $5,000 on your old car, but it is worth $6,000. The new lender will pay off your old loan and apply the remaining $1,000 towards your down payment for your new car. But, how does trading in a financed car work if you owe more than what it’s worth?

Can You Trade in a Financed Car When You Owe More Than it’s Worth?

Can you trade in a financed car when you owe more than it’s worth? Of course! People do it all the time, but you’ll need to decide if it makes financial sense for you. How does trading in a financed car work in that case? Either you pay the difference between what you owe and what the car is worth, or the dealer will take over your loan, but roll your negative equity into the loan on your new car. For example, you owe $5,000 on your old car but it’s only worth $4,000. You either pay the $1,000 difference to the dealer, or the dealer will add $1,000 to your new loan.


Can You Trade in a Financed Car for a Lease?

What if you want to lease instead of buy? You can trade in a financed car for a lease, but how does that work? The dealer will take over your loan and apply your positive equity to the down payment on the lease. But how does it work if you owe more than what the car is worth? Much the same way as if you were buying the new car. You can either pay the difference upfront or the dealer will add your negative equity to the amount of the lease, resulting in higher monthly payments.

Ask the Finance Experts at Honda Universe of Lakewood

Our Finance Managers will be happy to walk you through the details of trading in your car. We make it easy for you to get into your next car with our online financing tools and easy to read applications! You can even value your trade online to get a better idea of how much your current vehicle is worth. We’re just a short drive away from Jackson, so drop by or contact us today!


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1085 Ocean Ave (Route 88), Lakewood, NJ, 08701
Honda Universe 40.0844487, -74.1735865.