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90 MacKenan Drive, Cary, NC, 27511

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  • Mon - Fri7:00 AM - 6:00 PM
  • Sat7:00 AM - 5:00 PM
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  • Sat7:00 AM - 5:00 PM
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Can You Trade In a Financed Car?

2022 Kia Telluride parked in a desert

If you’re browsing our new vehicle inventory but you already have a financing plan on your current vehicle, you may be wondering, “Can you trade in a car you’re financing?” The answer is yes! You can trade in a financed car, 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. Learn more about how to trade in a financed car with Hendrick Kia of Cary below, or contact our finance team if you have any specific questions about your financing plan.


How Does Trading In a Financed Car Work?

Can you trade in a financed car for a lease? Yes. When trading in a financed car, your next acquisition can be obtained with whatever payment plan you desire, whether financing or leasing.

With that established, it’s time to move on: How do you trade in a financed car? There are a few steps you need to follow to trade in a financed vehicle. Read through them carefully below so you’re familiar with the process before you visit your Apex-area dealership:

  1. Determine the remaining balance on your loan. It is typically listed on your monthly statement.
  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 left over that will go towards purchasing a new car from the dealer. For example, if you still owe $7,000 on your car in Durham, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1,000 to contribute towards your next car.
  4. 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 occurs when a dealership says they will pay off your old loan no matter how much you owe. If this sounds too good to be true, that’s because it is. The price gets added to your new loan on the next car you buy, meaning you pay the dealership back for the old loan at the same time that you pay off the loan on your new vehicle. If carried out thoughtfully, this can be a manageable solution if you need a new car as soon as possible. It’s smart to consider cheaper used vehicles to help avoid going upside down on the new loan immediately.

How Soon Can You Trade in a Financed Car?

So, it’s been well established that the answer regarding “Can you trade in a financed car?” is yes. But, how soon can you trade in a financed car? Do you need to wait a certain number of months before you can move forward? You’re allowed to trade in a financed car any time you want.

However, it’s usually not recommended to trade in a new vehicle you’re financing before the one-year milestone. This is because new vehicles may depreciate as much as 20% in the first year. Usually, depreciation slows down to about 10% per year after that. If you make a small down payment and your vehicle depreciates rapidly in the first year of ownership, there’s a greater chance of dealing with negative equity if you try to trade it in early.

Upgrade Your Ride at Hendrick Kia of Cary

Can you trade in a financed car at Hendrick Kia of Cary? Of course! No matter what type of situation you’re dealing with, our finance associates will work hard to help you arrive at a favorable solution. Catch up on more car buying tips to prepare for your next purchase in Raleigh, like the benefits of new vs. used vehicles.

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