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.

About the Author

Leigh Thompson began writing in 2007 and specializes in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor's degree in business and personal finance.

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