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What if I Still Owe on My Trade-in Vehicle?
As a Buy Here-Pay Here used car dealership in Chico, CA you can trade-in your vehicle and use it as part of a down payment. If your trade-in vehicle is paid off, then the entire value of the vehicle would go towards the down payment. However, when a borrower owes more on the loan than their vehicle is worth, the trade-in process can become difficult – this is known as having negative equity. Equity is the difference between what a car is worth and the loan balance. If the vehicle’s negative equity is too high, then the trade-in may not be able to move forward. If the vehicle has positive equity where the value of the vehicle is higher than the amount owed, then the trade-in is likely to move forward. The dealer would apply the difference as the down payment. For example, if a customer’s owes $6,000 – and the vehicle worth came in at $8,000, then the $2,000 difference would go toward the down payment.
Trading In My Vehicle with Negative Equity
The buyer is always responsible for the difference of Negative equity. For example, if a borrower owes $8,000 on their trade-in vehicle but the vehicle is only worth $6,000. This means they are facing $2,000 of negative equity, and the difference is not just going to disappear. Customers must pay it off plus an additional amount for the down payment which can be a costly decision.
The Bottom Line
If you are facing less than perfect credit and need a car loan, Highway Motors can help you get financing whether or not you have a vehicle to trade in. We work with an in-house financial company equipped to handle your unique credit situations. Submit your vehicle information here to have your vehicle Trade-In value determined or if you are needing to sell your vehicle for cash you can also submit your vehicle information by Clicking Here