How to Trade in My Car Instead of Refinancing

Trading in your car lets you get out from under a high auto loan payment.

Trading in your car lets you get out from under a high auto loan payment.

Struggling with a car payment often sends young couples looking for their options. Refinancing an auto loan requires you to secure financing with a new lender. You often end up extending the life of the existing loan with a different interest rate. The alternative to refinancing is to trade in your car for another vehicle with a lower monthly payment. This is a way to trade in a vehicle you aren't pleased with and get out from under a huge debt.

Contact your auto loan creditor to find out the exact payoff balance for your car.

Find out the trade-in value of your car at the Kelley Blue Book or NADA website.

Inquire with several local car dealerships to find out a trade-in value for your vehicle. Shop it around to big dealerships and smaller ones. You may find a difference in the amount offered by each dealership.

Shop for another car to replace your trade-in vehicle. Fill out the paperwork with the dealership to place a hold on the vehicle.

Acquire new financing from your existing auto loan dealer or a new creditor. Fill out several applications with different lenders to get the best rate. Your credit score is not affected by multiple inquiries for auto loans within a 30-day period.

Provide the bill of sale to your new financing company. Fill out the auto loan paperwork with your new financing company to buy your new vehicle.

Get a check from the dealership for the trade-in value of your car. Take the check to your creditor to pay it off. Get a lien release and the title from the creditor. Take both documents to the car dealership to turn over property rights to the dealership and get your new car.


  • If you're doing business with only one dealership, Consumer Reports recommends negotiating the new vehicle's price before discussing the price for your trade-in.
  • You'll get more money for your vehicle if you sell it instead of trading it in. This option works best when you are upside down in a car loan.


  • Being upside down in a loan means you may have to roll any remaining balance after the trade into a new car loan.

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