Can A Car With A Title Loan Be Traded in For a Newer Car?

Daniel Joelson

Daniel Joelson

Total Posts: 344

Published Date: January 26, 2024

Daniel Joelson has been in the consumer finance space since 1994, he has helped to develop underwriting manuals for the financial sector. With a vast amount of Knowledge in consumer finance, he has been writing articles for all types of loans. With his knowledge, he is able to help many people to answer different financial problems.

If you are considering trading in your car for a newer one but still have a title loan, the answer is yes, it’s possible.

Here’s how it works:

What to Do with Your Previous Car

When you buy a new car, you will likely think about what to do with your current one. Two main options are selling it privately or trading it in at a dealership. Trading it in can be more convenient for many people, despite having its pros and cons.

Trading in Your Vehicle for a New Car

Trading in your vehicle means selling it to a dealership to get cash or credit toward the purchase of a new one. The dealership will then sell your old car to another buyer at a higher price.

However, if you still owe on a title loan, the process can be a bit more complex. Questions arise about what happens to the title loan, how much you can earn from the trade-in, and more.

Calculating Your Equity

To trade in a car with a title loan, you need to determine if you have positive or negative equity. Equity is the part of your vehicle that you own outright, you can find out your car value here. Calculate it by subtracting the remaining loan balance from the resale value of your car.

  • Positive Equity: If the difference is positive, you own more of the car than you owe on the loan.
  • Negative Equity: If the difference is negative, you owe more on the loan than the car is worth.

Knowing your equity helps guide the trade-in process and payment plan.

Can you sell your car while you have a title loan
Selling your car while you have a title loan

Trading In with Positive Equity

If you have positive equity, meaning you own more of the car than you owe, you can trade it in and apply the equity to your new car purchase.

For example, if your car’s resale value is $15,000 and you owe $5,000 on the loan, you have $10,000 in equity. The dealership might offer you less (e.g., $11,000), leaving you responsible for paying off the remaining $5,000 loan balance.

Trading In with Negative Equity

If you owe more on the loan than your car is worth (negative equity), consider waiting until you have positive equity or pay off the loan completely. Alternatively, you can:

  • Pay the Difference: Cover the shortfall between the loan balance and the car’s value.
  • Roll Over Negative Equity: Include the negative equity in your new car loan.

Tips for Trading In Your Vehicle with a Title Loan

Whether you have positive or negative equity, consider these tips:

  • Get Multiple Offers: Shop around at different dealerships to get the best trade-in value.
  • Negotiate: Don’t hesitate to negotiate for better terms.
  • Verify Loan Payoff: If trading in with a title loan, ensure the dealership pays off the loan on your behalf.

Conclusion  About Trading Your Car With A Title Loan

Trading in a car with a title loan online for a newer one is possible but requires careful consideration. Follow these steps to navigate the process smoothly and avoid complications.

TFC Title Loans has been helping people to use the equity in their vehicles since 1994, we are here to be your broker.

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DISCLAIMER: As our policy to make sure you know what we do and what are our limitations, we offer you these disclaimers. We are NOT A LENDER and we do not make short term cash loans or credit decisions. We are a referral service and work only with licensed lenders/brokers.

We may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. We do not offer or service student loans.

*Loan amounts by the lenders vary based on your vehicle and your ability to repay the loan.

*Since we do not lend money directly we cannot offer you a solicitation for a loan, except in the state of California. In all other serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans and Auto Title Loans are not available in all states and all areas.

*Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan.

*All lenders are responsible for their own interest rates and payment terms. TFC Title Loans has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

*The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you.Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically larger loans or higher risk loans use a GPS.

*In some circumstances faxing may be required. Use of your cell phone to receive updates is optional.

*Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

*Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

*Trading Financial Credit, LLC dba TFC Title Loans, Car Title Loans California, Dineromax. If you are using a screen reader and are having problems using this website, please give us a call at 1-844-242-3543 for immediate assistance.

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