According to Auto Credit Express, a car owner can trade in a vehicle even if he still owes on it. The dealer asks for the pay-off amount on the auto. If the payoff is less than the car value, then the difference is normally applied to a new car purchase.Know More
The old car debt can be paid off by the dealer when the new car is purchased. However, if the payoff amount is more than the value of the car, or if the purchaser is upside down on the old car loan, then purchasing a new car becomes risky says Auto Credit Express. Either the purchaser must pay the amount that is owed out-of-pocket or roll over the debt into a new loan.
Freecreditscore.com warns that the payments on an old car loan do not magically disappear if a buyer plans to trade in his old car and purchase a new one. The remaining balance still needs to be paid, by the car owner, car dealer or a bank loan.Learn more about Credit & Lending
Refinance a car by getting gathering information on the current loan and vehicle, shopping for and applying for the new loan, and contacting your insurance company. Additionally, ensure that the new lien holder pays off the original loan.Full Answer >
A pre-approved car loan means that a buyer has gone through basic approval steps for a loan to buy a vehicle. Lenders pre-approve auto loan applications up to a certain amount, which allows a buyer to go to a dealership with a purchase limit in mind.Full Answer >
Having a vehicle repossessed does not remove the borrower's obligation for the loan. Once the lender repossesses the vehicle and sells it at auction, the finance company also has the right to sue the borrower for the remaining balance on the loan. This balance is called the deficiency balance, according to Nolo.com.Full Answer >
Repossession of a vehicle can occur at any time after the car owner goes into default on the car loan. If an owner goes into default on a loan, it isn't necessary for a creditor to take him to court for repossession rights.Full Answer >