If you’re looking to trade in your car you may be wondering if you can do so if the car is financed by someone else. The answer is yes you can trade in a car that is financed by someone else but there are a few things to keep in mind first.
For starters you’ll need to check with the lender to make sure that they’re okay with the car being traded in. Some lenders may have stipulations in the contract that prohibit this so it’s always best to check first.
If the lender is okay with the trade-in then you’ll need to make sure that the outstanding loan balance is paid off in full before you can sign over the title to the new owner. This means that you’ll need to have the cash on hand to pay off the loan or you’ll need to get financing for the new car that will cover the balance of the old loan.
Once the loan is paid off and the title is transferred you can then complete the trade-in process with the new dealership. Keep in mind that you may still owe money to the lender if you’re trading in the car for less than what you owe on the loan. In this case you’ll need to make up the difference in cash or with financing from the new dealership.
So if you’re looking to trade in your car it is possible to do so even if the car is financed by someone else. Just be sure to check with the lender first and make sure the outstanding loan balance is paid off before you sign over the title.
Can you trade in a car that you’re still making payments on?
Yes as long as you have equity in the car.
What is equity?
Equity is the difference between the loan balance and the car’s current market value.
Do you have to have equity to trade in a car?
No but the trade-in value will be applied to the balance of the loan.
Can you trade in a car if you’re upside down on the loan?
Yes but you’ll have to pay the difference between the loan balance and the trade-in value.
Can you trade in a car financed by someone else?
Yes but you’ll need to get the lienholder’s permission.
What’s a lienholder?
A lienholder is the lender who financed the loan for the car.
How do you get a lienholder’s permission to trade in a car?
You’ll need to provide the lienholder with the new car’s information including the VIN make model and year as well as the name of the dealership.
The lienholder will then provide you with a pay-off amount.
Can you trade in a car if you’re still making payments on it?
Yes as long as you have equity in the car.
What is equity?
Equity is the difference between the loan balance and the car’s current market value.
Do you have to have equity to trade in a car?
No but the trade-in value will be applied to the balance of the loan.
Can you trade in a car if you’re upside down on the loan?
Yes but you’ll have to pay the difference between the loan balance and the trade-in value.
Can you trade in a car financed by someone else?
Yes but you’ll need to get the lienholder’s permission.
What’s a lienholder?
A lienholder is the lender who financed the loan for the car.
How do you get a lienholder’s permission to trade in a car?
You’ll need to provide the lienholder with the new car’s information including the VIN make model and year as well as the name of the dealership.
The lienholder will then provide you with a pay-off amount.
What if you can’t get a lienholder’s permission to trade in a car?
If you can’t get a lienholder’s permission you’ll have to sell the car privately.
