In general, you can trade in your car for a new one even if you’re still making payments on it. But first it helps to know how much equity you have in the vehicle. That’s the difference between your car’s current value and the amount you owe on the loan.

Will a dealership buy my car if I still owe money?

You can trade in a vehicle even if you still owe money on its loan. In fact, it’s common for dealers to take care of consumers’ old financing. They’ll pay off the remaining loan balance on your trade-in and obtain the car’s title directly from the lender.

Can I get car finance if I already have car finance?

Can you let me know what my options are? Yes, even if you have outstanding finance on your car, you may be able to get a new one before your agreement ends. You can end your existing agreement by paying the settlement figure. Typically, the further you are into your agreement, the lower your settlement figure will be.

Will my credit score increase if I pay off my car loan?

Whenever you make a major change to your credit history—including paying off a loan—your credit score may drop slightly. If you don’t have any negative issues in your credit history, this drop should be temporary; your credit scores will rise again in a few months.

Can I swap my finance to another car?

If you have a positive figure, great news! You can use this amount of money as a part exchange for your next car. However, if the figure is negative, you’ll need to pay that amount of money on top of your new car’s price. So it’s still possible to swap your car but being in negative equity can make the swap costly.

Yes, even if you have outstanding finance on your car, you may be able to get a new one before your agreement ends.

What happens if you trade in a car you still owe money on?

If your auto loan payoff amount is more than the dealer is willing to give you for your trade-in then you will still have to pay off what you owe on your old vehicle even if you trade it in.

How many cars can you have on finance?

A single applicant (meaning you are the only person on the application) can have a car, motorbike, or van all on finance with us. You are not, however, allowed to finance 2 cars on a single applicant application.

What to do if you owe money on a car?

You can also solicit cash offers from dealers using the Instant Cash Offer tool. Select a car. Pick out the new car you want to buy. Calculate payment. If you owe more on your current car than it is worth, expect to have that difference added to the loan amount of your new purchase.

What happens when I buy a new car with a loan?

If you buy a new car, you are, automatically, upside down (you owe more than it is worth) on the loan. The car depreciates as soon as you drive it off the lot since it is no longer considered new. 5  When you add in your current loan, you compound the problem.

Do you have to pay off your loan to trade in a car?

Experts advise paying off more of your current loan before trading in for something new. However, if you want to trade in a car that you still owe money on, dealers can let you know the bottom line of any new deal.

Can you sell a car with an outstanding loan?

You’ll need to know exactly how much you still owe your lender so that you can get a clear title. Eliminate the debt: Technically, you probably won’t sell your car with the loan outstanding. Instead, you’ll most likely unwind the loan at the same time as (or ideally before) you sell the car.