Camden, Alabama
29 Camden Bypass
Camden, AL 36726
(334) 682-4258

What to Know When Trading in a Car You Haven’t Paid Off Yet March 27, 2019

Camden, Wilcox
What to Know When Trading in a Car You Haven’t Paid Off Yet, Camden, Alabama

When shopping for new cars, it’s common practice to trade in your current vehicle to get a discount on your purchase. However, trading in your old car may not always be a good idea if you haven’t paid it off in full. Here’s what car buyers need to know before they try to set up a trade-in.

Benefits of Trading in Your Old Car

When shopping for new cars, trading in your current vehicle can have a significant impact on how much you’ll end up paying. Applying trade-in credit will reduce the total amount you need to finance, and lower monthly payments are attractive to anyone. Trading in your old vehicle will also reduce the state sales tax you’ll be required to pay. And, of course, if you’ve decided you want a new car, chances are you’re not going to want to keep the old one, too.

To get the best value from your trade-in, make sure your car is clean and in good condition. It may be worth getting an estimate for any needed repairs in advance to help you during negotiations.

But What if You Haven’t Paid off Your Old Car?

new carIf you’re still making payments on your current vehicle, you may need to be careful about trading it in. If the car is relatively new, there’s a good chance that the remaining value of the loan is worth more than the car itself. This happens due to the sharp depreciation that occurs shortly after buying a new car. You may be better off waiting until the car is older to trade it in.

You should also be mindful of your loan policies. Some lenders actually have prepayment penalties if you pay off your loan early—which is essentially what happens when you trade it in. A prepayment penalty fee could offset the financial benefits of a trade-in.


Whether you’re looking for new cars or used trucks, you’ll find the right match at McGraw-Webb Chevrolet in Camden, AL. Serving area drivers for over 25 years, this family-owned dealership is committed to providing friendly service and great prices so you can get into a new vehicle today. To learn more about their current inventory and friendly financing options, visit them online or call (334) 682-4258.

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