Things To Evaluate Before Rolling A Car Loan Into A New Car Loan
If the car you are driving no longer offers what you need, for whatever reason, you might be thinking about trading it in for a new one. If you do this and still owe money on your original car, you may need to roll over the balance of the old car loan into the new loan. Here are several things to know about this before you go through with it.
You should find out the deficit before going through with it
If you trade your car in for a newer car, you will have to find out two things. The first is the amount you owe on the car, and the second is the amount the dealer will give you for a trade-in. If you subtract the trade-in value from the amount you owe, you are likely to see that you owe more on the car than what the car is worth. This amount represents the deficit, which is the extra amount of money you are paying to trade the car in. This amount will be added to your new car loan, which means you will be paying more for the new car than the sticker price of the car.
You could always sell the car outright
When the deficit amount is too high, people will often decide to sell their cars outright instead of trading them in. You can typically get more money for a car by selling it outright rather than trading it in but doing this can be a process. You will first of all need to advertise your car, and then you will need to find a buyer for it. You will then have to wait until the buyer pays you for the car before you can go and purchase another vehicle. Because this process takes time, many people will simply trade their cars in and pay the deficit instead of going through all this trouble.
There are other options too
You should also realize there are some other options if you are in this situation. The first is to wait to buy a new car until you pay off your first car. The other option is to keep the first car and buy a second car, but this option would be hard to do if you cannot afford to have two car payments.
If you need a new car and have a car to trade-in, you should visit an auto dealer to start shopping for a car. You may also want to call a car loans lender to get approved for a car loan.