Can you trade in a car that still has a balance?

[Anonymous]

How does it work if you trade in a car that you are still paying on?

[Anonymous]

If it’s worth what you owe, you walk away. If you’re underwater, you have to write a check.

[Anonymous]

Of course

[Anonymous]

Anonymous wrote:If it’s worth what you owe, you walk away. If you’re underwater, you have to write a check.

Or they roll it into your new loan

[Anonymous]

Tell me you really can’t afford a new car without telling me…

[Anonymous]

Is there a reason why you need a different car, OP?
Like you just found out you're having triplets so you need to trade in your civic for a minivan?

[Anonymous]

Yes, but your old loan needs to be paid off.

If your trade-in value is more than your old loan balance, than the dealer will pay off the old loan and apply the remaining trade-in amount toward your new car purchase.

If your trade-in value is less than your old loan balance, than you need to cut a check for difference or finance the difference in a new loan. This financing will be at a really high rate (like credit card rate of 25%) if the loan amount is more than the value of the new car since the loan is not fully secured.