How To Trade in a Financed Car

Couple Trading in a Car
If you’re ready to trade in your current car for a new vehicle but you still owe money on the auto loan, you may be wondering if you can trade in a financed car. At most dealerships, you don’t have to fully pay off your auto loan before getting a new car, but the loan doesn’t just go away. Find out more about trading in a car that still has a loan balance with your local authorized BMW finance center, and find out how to trade in a car in Pekin or Decatur.

How Does Trading In a Financed Car Work?

  1. How much do you owe? Determine the remaining balance on your loan. It’s typically listed on your monthly statement.
  2. Get a vehicle value estimate. Use our Value Your Trade tool or one from a service like Kelley Blue Book to get an estimate on the value of your current vehicle. Note that this is simply an estimate.
  3. Get your vehicle appraised. Bring the estimate to the dealership you want to buy your new car from to get the vehicle officially appraised. It’s only once the vehicle has been physically inspected and appraised that the dealership will officially establish what the car is worth.
  4. Negotiate the trade-in offer. You can also try to negotiate with the dealership for a higher trade-in offer on your vehicle, but if you prefer a more simple and quick trade-in process, there’s nothing wrong with accepting the initial offer.
  5. Do the math. If the remaining amount of your auto loan is less than the trade in offer from the dealership, then you’ll have money leftover that will go towards purchasing a new car from the dealer.
    1. For example, if you still owe $7,000 on your car in Springfield, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1,000 to contribute towards your next car.
  6. Do you still owe money? If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car—this is called negative equity. With negative equity, most dealerships will give you two options:
    1. You can pay off the remainder in full before buying your next car.
    2. Or, you can trade in your vehicle for a new car and roll over the balance of the old vehicle’s loan into your new vehicle’s auto loan with the dealer.

What Does “Rolling Over” A Loan Mean?

Rolling over a loan means that the dealership will “pay off” the remainder of the loan amount on your existing vehicle, but the money owed doesn’t actually disappear. The old loan gets “rolled over” into the auto loan for your new vehicle, and it’ll be worked into your loan payment plan.

Turn to BMW of Bloomington for Your Auto Financing Needs

Are you ready to trade in a financed car for lease or for purchase in Normal? Before you take a test drive at BMW of Bloomington, be sure to check out our current new vehicle specials in Bloomington to get an even better deal on your next purchase. You can also rely on BMW of Bloomington for more car buying tips, and when you’ve decided which vehicle you want, apply for financing online to get the process started!

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1604 Commerce Pkwy Bloomington, IL


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1604 Commerce Pkwy Bloomington, IL


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1604 Commerce Pkwy Bloomington, IL
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BMW of Bloomington 40.4573646, -88.9743698.