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Can You Trade In a Financed Car?

Car Being inspected by magnifying glass

You can most definitely trade in a financed car — but that doesn’t automatically wipe out your outstanding loan obligation; you will still have to pay off the balance unless your loan is rolled over by the dealership at which you’re trading in the vehicle. Learn more about your options for trading in a car that still has a loan balance with your local authorized Mercedes-Benz finance center, and contact us if you have any questions about car loans and interest rates, selling a car, leasing a car, credit scores, and more in Beverly Hills. 


How Does Trading In a Financed Car Work?

The process of trading in a financed car works more or less the same as trading in a vehicle with no outstanding liens with the exception of paying off the loan. Here are the details:

  1. Figure out the remaining balance on your loan. It is usually listed on your monthly statement.
  2. Use our online Value Your Trade tool or one from another online service such as Kelley Blue Book to get an estimate on the value of your current car. Note that this is just an estimate, and it’s only once the vehicle has been physically inspected that you’ll get an official offer.
  3. If the remaining amount of your car loan is less than the trade-in offer, then you’ll have money left over that will go towards buying a new car from the dealer. 
    1. If, for instance, you owe $6,000 on your car in Inglewood, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $2,000 to contribute towards your next new Mercedes-Benz
  4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car, otherwise known as negative equity. This will either need to be paid off in full or rolled over into the new loan. 

What Does “Rolling Over” A Loan Mean?

When a dealership rolls over your old loan regardless of how much you owe, they pay off the loan balance but tack this amount onto the cost of your new vehicle loan to make up the difference. In essence, you wind up paying off the remainder of your loan, but it’s done in such a way that’s more manageable than all at once in a lump sum.


Rely on Mercedes-Benz of Los Angeles for Your Next Vehicle

Ready to step into a new Mercedes-Benz that’s just right for your Beverly Hills and Inglewood driving needs? Talk to our finance team today about your trade-in options, and be sure to check out our current selection of new vehicle specials while you’re at it. Then, apply for financing online

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