<img height="1" width="1" alt="" style="display:none" src="https://www.facebook.com/tr?id=547912885342136&amp;ev=PixelInitialized">
(973)529-836083 State Route 23 NorthHamburg, NJ 07419

If you’re ready to head to the car lot and trade in your ride for a newer, more economical or more suitable model but you haven’t yet paid off your existing car, don’t despair. You don’t necessarily have to wait until you’ve paid off your car to upgrade to a new one. Read on to learn how to roll existing debt into a new car loan.

Learn about trading in a car that has a balance.

When You Should Trade in Your Vehicle

In some cases, it’s obvious it’s time to trade in your vehicle. If you are routinely in and out of the repair shop, if you’re in constant fear your vehicle will break down or fail to start or if you own a small sports car and are expecting a new baby, it makes sense to buy a new car. There are other reasons people decide to trade in their cars, though. Some people buy a car, drive it for a while and realize it’s not a good fit for their lifestyle. Others feel compelled to always have the latest-and-greatest car on the market. Sometimes, people realize they can’t keep up with their monthly car payments and want to trade in their car for a more affordable one. Regardless of your reason for wanting to trade in your car, you have three options for trading in a car that has a balance.

Financing Option One: Pay Off the Balance

If you can afford to pay off the balance on your car before you trade it in, that may be the smartest approach. There is one caveat, though. Before you use money you have earmarked for a down payment for your next car to pay off your old car, talk to your lender. If you’re credit isn’t ideal, your lender may require a sizable down payment in order to approve you for a car loan.

Financing Option Two: Roll the Entire Balance into the New Loan

If you can’t afford to pay off your existing balance and your main goal is to get a new car with a monthly payment comparable to your old car, this option may be for you. The downside is your loan term will be longer because you’ll essentially be paying off two cars.

Learn how to roll existing debt into a new car load.

Financing Option Three: Incorporate Part of the Balance into the New Loan

A good compromise between paying off your old loan and rolling over the entire loan is to pay off as much of your old loan as you can afford and incorporate the remaining balance into your new loan. This option allows you to trade in for a more suitable car but secure a shorter term for your new car loan. The longer your loan term, the more you will end up paying for your car. Every dollar you can afford to use as a down payment reduces the amount of interest you’ll pay on your new car. Similarly, the lower the amount of your old loan you need to roll over, the less money you’ll pay in the long run.

If you are ready to trade in your car, contact us at Deboer’s Auto Sales and Service in Hamburg. Our team will help you find a quality pre-owned vehicle, give you a fair value for your trade in and work with you to determine the best approach for financing the purchase of your new car.

10 Tough Questions


Bill DeBoer

Written by Bill DeBoer

William J. DeBoer (Bill Jr.) is Co-owner and Vice President at DeBoer’s Auto. As the company’s General Manager, Bill has been responsible for bringing innovations in daily operations to the full-service, high-tech auto repair facility for 20+ years. Passionate about computers from an early age, Bill’s interest in technology gravitated to cars while he was in college. By obtaining a Certificate in Automotive Technology followed by a B.S. in Business Management from Penn State, Bill was able to fuse his interests into a car technology specialization and join the family business shortly thereafter.