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Can I trade in a car that I still owe money on?
So, your situation is that you have a car and want to get into a new one. What does that mean? You want to trade in your car to get into a newer one. A lot of people get confused when it comes time to trade in their vehicle if there is a lien or outstanding loan still applied to it. Automotive dealers are experts when it comes to how to accept trades with money that owes on them. The people are often confused though when it comes to the explanation of the trade, the value and payoff etc. For example, before tax, after tax, reconditioning, these are all terms that a customer may here.
This is a good start to how it works. You would take the selling price of the vehicle that you are going to buy. Then add tax and other fees, subtract your buyer’s allowance for the trade and then add you payoff to the total. This will give you your total amount of the vehicle. Then, subtract any down payment or rebates and that will give you the amount to be financed on your car loan. The payoff of your current car has to be paid off in full for the dealer to get the title for the trade. Basically when you trade your car in to the dealership, you are selling it to them. As much as it may not seem that way that is what is happening. In this case though, you are selling them a car that you still owe money on. Additionally, you can’t sell a car to anyone without showing your ownership of the vehicle. Also, when you refinance the payoff, you are giving the dealer the money to pay off your lien.
One thing to consider though is to make sure that the car dealer puts in writing that they are going to use the buyout of your car to go towards the new car immediately. This is very common because most dealers will take care of it right away. However, there are some cases where the dealer had some cash flow issues and they kept the money and waited until they could afford to do so until they paid off your loan. Understand that until the dealership pays that loan, you are responsible and still may be making payments on it. Just be careful. The bottom line is that the payoff that is still owed is your car loan and is your responsibility to be paid in full.
Thank you for reading this article it is brought to you by No Credit Check Car Loans you can find us online at http://www.nocreditcheckcarloans.ca we are your No Credit Check Car Loans, we are your No Credit Car Loans service provider.
