How to Trade-In my Car?

I bought my car for about $20000 using a personal loan instead of an auto loan. It was a one-time offer from USAA and the interest rate was 2.99%, which I figured was better than I would be offered fresh out of college from a car dealership, and I don't have to deal with anyone else other than USAA.

I am contemplating possibly trying to trade it in and get a different car. The car is obviously underwater given that it's a car, and I wanted to know if it's possible to trade it and then pay off about $13000 of that loan, and get the payments readjusted accordingly. And if I could even add that extra amount left over to an auto-loan instead. I don't know how it entirely all works, and if what I'm trying to do is possible.

4 Answers

  • 6 years ago
    Favorite Answer

    The other fellow is correct. If you trade it in, the car has to be cleared or paid off through the first loan. Was the car itself used as collateral meaning USAA shows up as a LIEN on the title? As did you just take out a personal loan & buy the car outright which I am thinking it was the first question I asked. If so, the car has be paid off, no dealership will give you what it is worth. I suggest you first contact USAA with this since they are the ones holding the title

  • 6 years ago

    Banks WILL NOT finance negative equity. That negative balance on the loan has to come out of your pocket. If the amount is too high and you can't pay it off, you can't trade in the car.

    It's just that simple.

    When you trade in a car all the dealer is doing is offering to buy the car from you. The money they offer you has to pay off the existing loan (if there is one). If they money they give you can't pay off the loan in full then you are responsible for the balance due. No bank is going to loan you $20,000 on a car that's only worth $14,000 just so you can pay off an old debt. That debt is YOURS and no bank is going to assume it.

  • Never
    Lv 7
    6 years ago

    Lenders dont like to refinance negative equity but they might for small amounts & good customers.

    So it all depends on how upside down you are.

    Find out the cars wholesale value and compare it to the payoff. If its thousands upside down, you cant trade it without paying the difference.

    But, you say you took a personal loan.and in that case, its not tied to the car.

    However, 2 high dollar loans might not be possible either depending on your income & other debts.

    Who has the title ? If you have it, it was a personal loan. If the credit union has it, it was a car loan.

  • Its possible. Go to a dealer who specializes in "special financing" and they will appraise your cars value. Then the difference in the value and what you owe will calculated and the loan approval will be based upon your ability to repay the loan and your credit score.

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