8-Step Guide to Trading In Your Financed Vehicle in Lebanon, TN
Trading In a Financed Car in Lebanon, TN
It may involve a few extra steps, but trading in a car that is still under a financing agreement is pretty straight-forward. If you’re interested in purchasing a new GMC Terrain or a Chevrolet Silverado 1500, trading in a current vehicle that still has an outstanding balance can help you achieve that goal. While there are some things that you should consider before starting the process, here is a quick guide to how you can complete the process smoothly.
Step 1: Find Out How Much Your Vehicle is Worth
Before you visit a dealership and start browsing the inventory, it helps to know your vehicle’s trade-in value. You can use resources like Kelly Blue Books or Edmunds, which assess vehicle value based on market demand of the make and model, its age, mileage, and conditions. Reputable dealerships like Wilson County Chevrolet Buick GMC usually offer the same type of service online. You can use our value your trade tool to get an instant trade-in evaluation, giving you a realistic idea of what you could expect.
Step 2: Determine Your Loan Payoff Amount
Write down your vehicle’s worth and move on to the next step, which is figuring out the payoff amount for your current financing agreement. What’s a payoff amount? It’s the balance remaining on your car, including any interest accrued. You can obtain this figure by contacting your lender or checking your online account if they offer one. Understanding the payoff amount will help you determine if you have positive or negative equity in your vehicle.
Step 3: Assess Your Equity Situation
Equity in a financed vehicle is the difference between your car’s trade-in value and the payoff amount. You’ll fall into one of two categories:
- Positive Equity: Your car is worth more than what you owe. This is an ideal situation because the dealership will probably offer you enough to cover the loan balance and even put some toward your next car.
- Negative Equity: You owe more on your loan than the car’s trade-in value. If you’re in this situation, the difference will need to be covered, either by paying the remaining balance upfront or rolling it into the new loan.
Although you can still trade in your vehicle with negative equity, it may not be in your best interest, as you’ll still have to pay for a portion of the remaining balance on top of the cost of the new vehicle.
Step 4: Decide Whether to Trade or Sell Your Vehicle Privately
Trading in your vehicle with a reputable dealership you can trust to give you a fair price for your car is the most convenient option when you’re ready for an upgrade. However, you can also opt to sell the car privately. Sometimes, private sales can win you a higher price, which can be a boon if you have a loan balance to pay off. The downside to private sales is that you will be responsible for all the paperwork, and you will need to put in the effort to advertise the vehicle in order to find a buyer. Private sales can also take longer to secure, so if you’re in a hurry to find a new vehicle, it may be best to trade it in instead.
Step 5: Gather All Your Documents
If you decide that trading in your vehicle with a dealership is the best option for you, gather the following documents to take with you to the dealership:
- Loan Payoff Document: This shows the remaining balance.
- Vehicle Registration and Title (if available): If you have a title, bring it; otherwise, the dealer will work with your lender.
- Driver’s License: Identification is required for the transaction.
- Car Keys and Manuals: Providing a complete set of keys and the vehicle’s manual helps the trade-in process.
Step 6: Negotiate the Trade-In Offer
After assessing your vehicle, the dealership will make a trade-in offer. You can use your research on trade-in values to negotiate a fair deal, especially if you’ve found that other dealerships offer a higher trade-in estimate. Remember that dealerships may differ in how they handle negative equity, so don’t be afraid to shop around or ask questions about how they manage financing.
Step 7: Pay Off or Roll Over the Balance
If you have negative equity and can’t pay the difference outright, dealerships may allow you to roll over the remaining balance into your new car loan. While this makes the trade-in process easier, it will increase your new car’s loan amount, potentially affecting your monthly payments. Be sure to understand the impact this will have on your budget.
Step 8: Finalize the Trade and Sign the Paperwork
Once you agree on the trade-in offer, the dealership will handle the loan payoff directly with your lender. You’ll review and sign the paperwork to complete the trade-in and finalize any new financing if you’re purchasing a new vehicle.
Trading in a financed vehicle doesn’t have to be complicated. By following these steps and understanding your equity, you’ll be better equipped to make a deal that meets your financial and driving needs. Whether you’re upgrading, downsizing, or simply ready for a change, trading in a financed vehicle can be a rewarding move toward your next car.