Can You Trade-In a Financed Car?

Man Signing Contract at Car Dealership

To be blunt, yes, but the process differs depending on how much you still owe on the vehicle. It can seem complicated, but an easy outline for Aurora drivers is below. Because the current loan on your vehicle isn’t abolished when you trade it in, you’ll have to pay off the remaining balance. The trade-in process is different for a vehicle with outstanding payments vs. a vehicle that has been fully paid off, and our Naperville-area finance department will walk you through those discrepancies.

How Does Trading In a Financed Car Work?

Before you apply for financing on your new car, you may have some questions about trading in your vehicle. Trading in a financed car depends on the type of equity you have.

  • Positive equity means your car is currently worth more than the remaining amount you owe on it. In this case, that difference will be applied to the purchase of your new car like a credit.
  • If you have negative equity, this means your car is worth less than what you currently owe on it. In this case, the dealership will give you enough to pay off the remainder of the loan when they purchase your vehicle back from you.

Think of it this way: if you owe $5,000 on your car, and the dealership offers $8,000 to buy it, the loan will be paid off when the dealership takes it over. The remaining $3,000 will then be removed from the price of the new vehicle you purchase.

What Does Rolling Over a Loan Mean?

When the dealership says they will pay the remainder of your old loan in the case of negative equity, this is referred to as “rolling over” a loan. This price will be tacked on to your new loan on your next vehicle. This means your new loan will account for both your new vehicle and for the dealership covering the remaining balance on your trade-in. Our team of financial experts can more fully explain how this works, even if you have less than ideal credit.

Get Finance Help From Valley Honda

For Bolingbrook drivers ready to move away from their financed vehicle, you’ll find all the help you need at Valley Honda. Whether you’re looking to trade-in for a new car to cruise around Chicago or need a reliable commuting vehicle, contact us for more advice regarding the financing process.

Explore Our Models

  • 2020 Honda HR-V Configurations

    Smaller, more versatile SUVs are popular on the Aurora market right now, which is why the 2020 Honda HR-V is such an enticing prospect. This vehicle allows drivers to take advantage of stellar SUV performance and upgrade for luxurious features on the interior of multiple HR-V trims. Valley Honda covers Honda HR-V trim levels in detail…

  • 2020 Honda Accord Trim Levels

    Aurora drivers looking for a new sedan probably have the 2020 Honda Accord on their shortlist. Across the many Accord configurations, virtually anyone can find the technology, comfort, and performance features they would expect in a modern vehicle. There are many options available, so Valley Honda covers the 2020 Honda accord trim levels below. Learn More…

  • 2021 Honda Pilot Cargo Space

    Aurora drivers looking for a new SUV have probably eyed the 2021 Honda Pilot. This SUV hasn’t just been designed for comfort — it also has plenty of utility if you need to carry cargo around Naperville and beyond. Valley Honda covers the new Honda Pilot cargo space specs and more below, and then compare them…

Saved Vehicles


You don't have any saved vehicles!

Look for this link on your favorites:


Once you've saved some vehicles, you can view them here at any time.

Contact Us

(630) 851-5700

Call Now

4173 Ogden Avenue • Aurora, IL 60504

Get Directions

Today's Hours:

Open Today! Sales: 9am-9pm

Open Today! Service: 7am-9pm

Open Today! Parts: 7am-9pm

Valley Honda 41.7503286, -88.2129555.