Trading in a Car With a Balance

Are you considering trading in a car with a loan balance? At Mercedes-Benz of White Plains, we frequently encounter Scarsdale customers with this question and have the expertise to guide you through the process seamlessly. Let’s explore: “Can I trade in a car with a balance?” and “What happens if I trade a car in with a balance?” 

Can I Trade in a Car With a Balance?

Yes, you can trade in a car that still has a balance, meaning you owe money on it. Here’s what typically happens in this scenario:

1. Appraisal of Your Car

The dealership will appraise your car to determine its trade-in value. This amount is based on factors such as the car’s condition, mileage, market demand, and history.

1. Paying Off the Balance

If the trade-in value of your car is more than the amount you owe on it, the dealer will pay off the loan balance and then apply any remaining equity toward the purchase of your new car. For example, if your car is appraised at $15,000 and you owe $10,000, the dealer pays off the $10,000 loan, and the remaining $5,000 can be used as a down payment on your next vehicle.

1. Negative Equity

If the trade-in value is less than the amount you owe, you have negative equity (often called being “upside down” on your loan). In this case, you have a few options:

• Roll Over the Negative Equity: You can roll the negative equity into the new loan. This means adding the difference to the amount you finance for the new vehicle, which increases your loan amount and potentially your monthly payment.
• Pay the Difference: You can pay the difference between the trade-in value and the loan balance in cash to eliminate the negative equity.
• Wait to Trade: Another option is to wait until you have paid down the loan sufficiently to eliminate the negative equity before trading in the vehicle.

“What happens if I trade a car in with a balance?” Consider the financial implications of trading in a car with a balance, especially if you have negative equity. Rolling over negative equity into a new loan can lead to higher monthly payments and paying more in interest over the life of the new loan. Always review the numbers and consider your financial situation and goals before proceeding.

Trading in a Car With a Loan Balance at Mercedes-Benz of White Plains

Our experienced team navigates through the complexities of trading in vehicles with outstanding loans. We aim to provide a hassle-free experience, from evaluating your car’s value to managing paperwork. Whether your vehicle has positive or negative equity, we have solutions to accommodate your situation. Our goal is to ensure you can transition into your new Mercedes-Benz effortlessly!

If you’re wondering, “Can I trade in a car with a balance?” or “What happens if I trade a car in with a balance?”, we’re here to answer your questions. For more detailed insights and benefits into the mechanics of trading in a car with a loan balance, consult our financial experts or visit White Plains, near Purchase and Armonk.