Can I trade in my financed Hyundai for a cheaper one if the car is worth more than the loan balance?

"I have a Hyundai Accent with around $4,000 in positive equity (worth $10,000, but car loan is at $6,000).

I want to lower my payments by getting a cheaper car.

Can I do a trade-in on the car to get a less expensive one?"

Answer
“You definitely can make this deal work. If you trade the car in, the dealer will give you a “dealer value” for the car, which is lower than a private-party value.
This money allows you to pay off your original loan and gives you money to put toward the new loan. Keep in mind that if you sell the car privately, you can probably get about 20% more for the vehicle than the dealer will give you.
After you trade the car in, the loan process is the same as the first time you got a loan. Make sure to shop around, so you can get the best rate possible. Do the same with your car insurance to pay the least amount possible.”
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Eric Schad
Answered on Jun 18, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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