Can You Trade-In Your Used Car that You Still Owe Money On?

Trade-ins are great options to get an upgrade. You can take your current car to a dealership, sell directly to the dealer, and buy a new used car at a price discounted by the trade-in value and get your required update. However, some owners look to trade-in too early. And in such cases, these sellers still owe auto financing money to the lenders due to the extended credit span. If you are looking to sell your current car that still has a lien on it, know that the process is not easy or widely accepted. Yes, you can trade-in used cars in Spartanburg, SC that still has a lien but the cons do outweigh the pros.

Trading your used car with a lien

The first hurdle to trading or selling your used car with a lien is that your lender still has the vehicle’s title. And it is mostly up to the lender to decide if it can trust the new financing institution or not. Some lenders, thus, have refinancing options while others require you to finish paying for the debt before thinking about trading or reselling. Logically, your lender will try to protect its credit. It may ask to look into the new buyer’s credit score, the business’s accreditation, and reserves the right to refuse if substantial credit risk is involved.

Second, if your lender agrees to the refinancing scheme when you can sell your used car with a lien, do not expect to trade in at impressive rates. A dealer willing to buy your used car with a lien will have a few overhead costs to pay and it will deduct those from the trade-in value that you receive. Search for any car dealerships near me and you will have the same answer. Trading a used car without a lien fetches more money.

Lastly, you may choose to sell your used car privately. Not take the trade-in route and sell on your own to mimic the trade-in process. But here again, you will have to fulfill a host of terms before you can go through with the process. The lender will not release your title unless the auto loan is paid in full. You cannot sell your vehicle for anything lower than the amount you owe. And the buyer’s finances and credit scores will always matter before any talks about the transaction can take place.

What should you do?

Plan your financing before buying used cars and used trucks in Spartanburg, SC. If you feel that you might need an upgrade after 3 years, take an auto loan for that span and go for trade-ins after your due has been paid. Just because the process is there, it does not mean you have to use it. If you can avoid selling your car early, stick to that plan by all means.

At Family Auto, you can plan to limit your credit span to 3 years or less. You can trade in your old car at attractive rates and minimize your loan burden while buying a used car. Trading with a lien does not bring a lot of benefits. And the involved hassles are not worth it until the need is strong. Consult with our bad credit auto loan experts and get the best financing deal in Spartanburg. Select from a range of quality used cars that will hold on to their resale value just after you finish paying off your auto debt.