How do car dealers treat a trade in if you still owe a years worth of payments on the car?

I can’t help but look around at all the cheap prices on cars and was thinking of making an upgrade. I still have a year of payments on my current car but I was curious how a dealer would go about trying to make a deal with me. Can I trade in a car which I still owe money on? Do they just knock the balance off the trade in value? I am totally clueless and would appreciate any help.

OK. Twisted needs to quit answering questions that he doesn’t know the answer to. This is the third or fourth answer of his that is TOTALLY wrong.

Here is how it works (assuming a few things):

Say you owe one years worth of payments at 300.00 per month.

That is 3600.00. If your car is worth 2600 for example, you will have to roll in 1000.00 on the next purchase.

If your car is worth 4600.00, you have 1000.00 worth of equity. That is used as down payment money.

The dealership pays off the lender (whatever bank it is…Wells Fargo, Toyota Financial, American Honda Finance Corporation, or etc.), and you drive away in a new car. It’s that simple.

If dealerships weren’t allowed to take in trade a car that has payments left on it, NO ONE would be able to buy a car.

I REALLY wish people would answer questions that they know the answer to for sure. Not make up some BullSH&t.

So, the answer to your question is yes, you can trade a car in that you still owe money on. I deal with it every day.

From your friendly Toyota Salesperson icon smile How do car dealers treat a trade in if you still owe a years worth of payments on the car?

If you are in Northern Indiana, email me. I can help.

Edit:
Twisted, I find it shocking that you cannot trade in a vehicle if you owe money in the UK. Why can’t the dealership cut a check for it, payoff the lender and go from there? I would have to have confirmation on that from another person in the UK.

This entry was posted on Monday, March 14th, 2011 at 6:40 pm and is filed under car dealers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Responses to “How do car dealers treat a trade in if you still owe a years worth of payments on the car?”

  1. pedro7of9 Says:

    March 15th, 2011 at 12:06 am

    the dealer will say " i can put you in this car today" if you still owe they roll over the loan and you get a new one…
    References :

  2. laughter_every_day Says:

    March 15th, 2011 at 12:49 am

    When you sell a car that you do not yet own, to a dealer or to anyone else, you take the money and use it to pay off the loan. The lender then sends the title. In the case of a trade-in, the lender sends the title directly to the dealer. The price you pay is the price of the new car, minus the amount allowed for the trade in plus the amount needed to pay off the old loan.
    References :

  3. jammin Says:

    March 15th, 2011 at 1:07 am

    That’s pretty much it if you just want to get a new vehicle and get out from under your old one.
    The only drawback is that they will not give you what the car is actually worth. Blue book means nothing to them.
    They are out to make a profit and will offer you as little as they can for your trade in. That’s just good business.
    If possible, I would sell the car to an individual for blue book minus what you owe and pay it off. Then take the cash that you get and put it down on a new car.
    The more cash you put down, the better deal you will get.
    References :
    Done it both ways many times.

  4. Twisted_Ace Says:

    March 15th, 2011 at 1:12 am

    Assuming that:

    a) …you are in Great Britain and
    b) …the car is on finance

    you cannot do what you are suggesting.

    This is because under U.K. law, you don’t actually own the car, the finance company does. This means that you cannot legally sell the car until you have paid off all the money you owe..

    No reputable dealer would consider a trade-in on a car which has outstanding finance.

    Rob R. – kindly read what my answer actually says, rather than what you THINK it says.

    I am in Great Britain.
    You are in the U.S.A.
    Our finance laws are different. My answer clearly states: "Assuming that you are in Great Britain". Under British law, my answer is correct.

    Check the link below:

    Scroll down to ‘Types of Car Finance’
    Then down to ‘Car Hire Purchase’ (which is what the asker has probably got).
    Under ‘Disadvantages’, it says, "Car remains the lender’s property until the agreement ends."

    Yes, it’s a PITA, but that’s British law, unfortunately…
    References :
    http://www.insolvencyhelpline.co.uk/legal_issues_explained/car_repossession.php

  5. Rob R Says:

    March 15th, 2011 at 1:47 am

    OK. Twisted needs to quit answering questions that he doesn’t know the answer to. This is the third or fourth answer of his that is TOTALLY wrong.

    Here is how it works (assuming a few things):

    Say you owe one years worth of payments at 300.00 per month.

    That is 3600.00. If your car is worth 2600 for example, you will have to roll in 1000.00 on the next purchase.

    If your car is worth 4600.00, you have 1000.00 worth of equity. That is used as down payment money.

    The dealership pays off the lender (whatever bank it is…Wells Fargo, Toyota Financial, American Honda Finance Corporation, or etc.), and you drive away in a new car. It’s that simple.

    If dealerships weren’t allowed to take in trade a car that has payments left on it, NO ONE would be able to buy a car.

    I REALLY wish people would answer questions that they know the answer to for sure. Not make up some BullSH&t.

    So, the answer to your question is yes, you can trade a car in that you still owe money on. I deal with it every day.

    From your friendly Toyota Salesperson :)

    If you are in Northern Indiana, email me. I can help.

    Edit:
    Twisted, I find it shocking that you cannot trade in a vehicle if you owe money in the UK. Why can’t the dealership cut a check for it, payoff the lender and go from there? I would have to have confirmation on that from another person in the UK.
    References :

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