How to trade in my car with payments left on the loan?
- Author James Abbas
- Published May 22, 2020
- Word count 874
Selling a car (whether new or used) is truly a complicated process. It takes a lot of preparation and hard work to turn a used car into cash. And, you can be at your wit’s end if you are looking to sell a car that’s not paid off. The key here is to go for a private party sale or auto dealerships. However, you will need to understand how you can trade in a car that’s not paid off.
So here are some great tips that will help you take an informed decision.
Is it possible to trade in car when you owe money on it?
Of course, you can find various places that trade in vehicles that aren’t paid off. Most auto dealerships offer easy and quick process for selling such type of automobiles. Oftentimes it will take just one day to trade in your car at a dealership. Just remember to do your homework prior to contacting a dealer. It will help you to choose the next auto model that you want to buy.
The dealers will take care of all the details concerned with the remaining payments of the loan on your automobile. You don’t need to wait to recover the title of ownership from your lender. The dealership will directly talk to your lender for settlement of unpaid debt. They will handle all the legalities on your behalf. So, you don’t need to give a prior notice to the dealership.
If the trade-in-value that exceeds your unpaid loan amount, then it will directly be adjusted for your next auto purchase. In contrast to this if the trade-in value is not more than the money you owe. The dealers will adjust the balance amount in your contract for financing the next purchase of your car. Whatever the situation is make sure that the dealer pays your current loan in 10 days. Otherwise, your lender will suppose that you have failed to pay the unpaid loan payments.
Determine the payments left on the loan
When you decide to trade in a car that you still owe money on make sure to determine the unpaid amount. This will help you to understand how dealerships works out to settle the unpaid loan. To find it your just need to talk to your lender. Other than this, you can also check your last loan statement or use online platforms. But it is always great to get help from your lender. It is because the interest regularly keeps accumulating on your loan. Most often the trade-in offers are more than the outstanding amount of loan on your automobile.
Find out your vehicle’s worth before contacting a dealership
It is the most important step when you choose to trade in your used car. Knowing your vehicle’s worth prior to getting in touch with a dealer will help you to take an informed choice. This means you will be able to know if you are getting fair offer your car trade-in. There are a number of ways to find your car’s actual worth. You can check websites selling automobile with specifications same your vehicle. Otherwise, you can consider getting online car valuation using popular websites like Edmunds and Kelly Blue Book.
Get a clear idea about the trade-in-offer
When dealers offer you a trade-in value make sure to verify that it is correct. Otherwise you can get scammed by dealers whose sole motive is to earn profit. If they offer you a trade-in value that is more than the balance unpaid on your loan. Then, you are getting a fair value. However, all dealerships won’t let you in advance if they are offering a price higher than the remaining debt you owe. So, when you find out that your vehicle worth less than the remaining loan. You can say that your car loan is upside-down. This situation can be also referred as being underwater or negative equity. Also remember to get trade-in offers from multiple dealers so you can select the one offering highest value.
What to do with a car that is underwater?
If you find yourself with car having negative equity you must consider selling it personally. It always increases your chance for fetching a higher price for your automobile. As you already know what it actually worth. By getting a fair price you can easily handle the negative equity if it is a small amount, usually less than $1,000.
On the other hand, if your car’s negative equity exceeds $1,000, you can consider adding it your next loan. Just make sure to do your homework otherwise you can get trapped in the vicious cycle of increasing debt. The best idea is to avoid buying a vehicle as long as you become capable enough to pay your loan. It’s a smart way to shift your loan from negative equity zone to positive equity.
Always keep in mind to check with your dealer if the current debt has been cleared. Don’t forget it’s you have taken loan from the lender not the dealership. If you ignore it or the dealer fail to make outstanding payment on time, then it can damage your credit score.
James Abbas, director of Taha Car Collection. James loves writing about the automotive industry and helping people by answering their questions.Article source: http://articlebiz.com
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