Buying a new car can sometimes be a real challenge, especially when you need to trade in a car on which you still owe a balance. This is when it pays to know more about this trade-in process. Here are 5 tips that will show how to trade in a care with a balance on it.
Tip 1 – Compute Finance Amount
To understand the amount you can expect to finance when trading in your car, add sales tax and miscellaneous fees, subtract the amount the car dealer has offered you for your car. Then, add the amount you still owe on your trade in. Finally, subtract your down payment and applied rebate. This is the amount you will finance.
Tip 2 – Payoff Balance
The dealer will legally purchase your trade-in by paying off the balance you owe. He will then add the amount he paid for your trade-in to the amount you are paying him for your new car.
Tip 3 – Signed Payoff Agreement
Ask the car dealer to give you a signed statement that defines the date he will pay off the car you're trading in.
Tip 4 – Confirm Dealer Payoff of Trade-In
Check with the finance company that held your old car title to confirm that the dealer actually paid off the balance you owed.