When you trade in a car that still has a loan balance you will be responsible for paying off the loan balance that remains on the loan. The following information will explain what happens to a loan when you trade in a car, what it means to you and what you can do to reduce the impact.A Trade-In With a LoanBegin with this example: You drive a car with an outstanding loan balance of $6,000. You want to trade in the car on a new one. The dealer will give you $4,000 for your trade in. That means you still…
What Happens to Your Loan When You Trade In a Car?
Posted by admin on June 7, 2010 in auto loans with bad credit · 13 Comments
what happens with your balance on your loan when you trade in your car but don't buy anything?
I’m trading in my vehicle to a dealer and giving them cash for whatever I’m under on my car. I’ve never done this, so how can I know for sure the dealer will pay the rest of my balance after I’ve already given them my car and my money? please help!
If you do that, they have to pay the money to the place you have the loan with in order to get the title, so they can sell it. Just keep in touch with your loan company to ensure that the loan is paid in full. The dealer you bring the car to will call the loan company to ask what the 10 day payoff is anyway, and you will work with them from there….Say if the 10 day payoff is 5,000, and they are offering you 4,000 for the car…You would have to give them 1,000 for it. 10 day payoff is the payoff of your car within the next 10 days…Takes off the interest you would pay next month through the end of your loan.
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If you are not getting a new ride and only "selling" it to the car lot, take their check for the total of your debt to your bank. If it is a reputable lot I wouldn’t be worried but it never hurts to get a signed contract just like they always do. In order for them to get the lien released by the bank it has to be paid, so I wouldn’t worry much.
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FOR YOU PROTECTION GET SOME TYPE OF SIGNED CONTRACT FROM THEM THAT STATES EVERYTHING.
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If you are doing this at a larger reputable dealer I would not worry. The only way they can re-sell the vehicle to someone else is to have free and clear title. You could however request a copy of the check they send to your lien holder as proof for your records. If the dealer refuses to provide a copy of this I would be very concerned. Calling your lien holder every couple of days to verify yourself would not be a bad idea either. Thanks Scott Stanko
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