Trading In Your Financed Car: An Overview of the Process

Introduction

If you have a financed car, you may be considering trading it in for a newer model. Trading in a financed car can be a complicated process, so it’s important to understand the details before making a decision. This article will provide an overview of the process of trading in a financed car and help you determine if it’s the right choice for you.

Definition of “Financed Car”

A financed car is one that has been purchased with a loan from a lender. The borrower makes regular payments to the lender until the loan is paid off. Once the loan is paid off, the borrower owns the car outright.

Overview of Trading In Your Financed Car

Trading in your financed car is a way to get rid of your current vehicle and upgrade to a new one without having to sell your car privately or pay off the loan first. You can trade in your financed car at a dealership, which will then take the car as a payment toward the purchase of a new vehicle. Trading in your financed car can be a convenient option, but there are some things to consider before making a decision.

Research Your Options: Understand the Pros and Cons of Selling or Trading In Your Financed Car

When deciding whether to trade in your financed car, it’s important to weigh the pros and cons. Consider your financial situation, how much you owe on the car, and what you want to do with the proceeds from the sale or trade-in.

Pros of Trading In Your Financed Car

One of the main benefits of trading in your financed car is convenience. Trading in your car at a dealership is a fast and easy way to get rid of your old car and upgrade to a newer model. It also eliminates the hassle of finding a buyer, negotiating a price, and dealing with paperwork. Additionally, trading in your financed car can help you avoid paying taxes on the sale of your car.

Cons of Trading In Your Financed Car

One of the biggest drawbacks of trading in your financed car is that you won’t get as much money for it as you would by selling it privately. Dealerships generally offer lower trade-in values than private buyers because they need to make a profit on the sale. Additionally, depending on the amount you owe on your financed car, you may end up owing money after the trade-in. Finally, trading in your financed car means you’ll have to take out a loan for the new car, so you’ll still be paying off a car loan.

Calculate the Trade-In Value of Your Financed Car

Before trading in your financed car, it’s important to calculate its trade-in value. This will give you an idea of how much you can expect to get for your car and help you determine if it’s worth trading in.

Steps to Calculate the Trade-In Value of Your Financed Car

To calculate the trade-in value of your financed car, follow these steps:

• Find out the Kelley Blue Book value of your car. This is the estimated value of your car based on its age, condition, and mileage.
• Contact your lender to find out how much you still owe on your car loan. Subtract the amount you owe from the Kelley Blue Book value to get the trade-in value.
• Take the trade-in value and subtract any taxes or fees associated with the trade-in.
• Subtract the value of any accessories or upgrades you’ve added to the car.
• Subtract any negative equity you have in the car (i.e., the amount you owe on the car is more than the trade-in value).

Prepare Your Financed Car for Trade-In

Once you’ve calculated the trade-in value of your financed car, it’s time to prepare it for sale. This includes cleaning the car and making any necessary repairs.

Cleaning the Car

Giving your car a thorough cleaning is one of the best ways to increase its value. Vacuum the carpets, clean the windows, and wash the exterior. If you don’t have the time or energy to do it yourself, you can hire a professional detailing service.

Making Repairs

If there are any minor repairs that need to be made, such as replacing worn tires or fixing broken lights, it’s a good idea to do them before trading in your car. Making repairs can increase the trade-in value of your car, so it’s worth the effort.

Negotiate a Fair Price for Your Financed Car

Once you’ve prepared your car for sale, it’s time to negotiate a fair price. Negotiating can be stressful, but it’s important to remember that you have the upper hand. The dealer wants to make a profit, but you want to get the most money possible for your car.

Suggestions for Negotiation

• Do your research. Before negotiating, research the market value of your car so you know what to expect.
• Be firm. Don’t let the dealer talk you into a lower price than you’re comfortable with.
• Be willing to walk away. If the dealer isn’t offering a fair price, don’t be afraid to walk away and look for another buyer.

Find Out What You Owe on Your Financed Car

Before trading in your financed car, it’s important to find out how much you owe on the loan. This will help you determine if you’ll owe money after the trade-in.

Contacting Your Lender

You can contact your lender to find out how much you owe on your car loan. They will be able to tell you the balance of your loan and any other fees or charges associated with it. It’s important to have this information before trading in your car so you can make sure you’re not paying more than you owe.

Consider Selling Your Financed Car Privately

If you’re not sure if trading in your financed car is the right choice, consider selling it privately. Selling your car privately can be more time-consuming, but it can also be more profitable.

Advantages of Selling Your Financed Car Privately

One of the main advantages of selling your financed car privately is that you can often get a higher price than you would from a dealership. Private buyers are usually willing to pay more for a used car than dealerships because they don’t have to make a profit on the sale. Additionally, you can often negotiate a better price when selling privately because you’re dealing directly with the buyer.

Follow Through With Your Decision to Trade In Your Financed Car

Once you’ve decided to trade in your financed car, it’s time to finalize the deal. This includes signing the paperwork and transferring ownership of the car.

Signing the Documents

You’ll need to sign a few documents to complete the trade-in process. These include a bill of sale and a title transfer form. Make sure you read all of the documents carefully before signing, and keep copies for your records.

Transferring Ownership

After you’ve signed the paperwork, the dealership will transfer the title of your car to them. They will then contact your lender to pay off the remaining balance on your loan. Once the loan is paid off, the car will belong to the dealership.

Conclusion

Trading in your financed car can be a convenient way to upgrade to a newer model without having to sell your car privately or pay off the loan first. However, it’s important to understand the process and consider all of your options before making a decision. Research your options, calculate the trade-in value of your car, prepare it for sale, and negotiate a fair price. By following these steps, you can make sure you get the most money for your car and make the best decision for your finances.