Can you trade a car in with a title loan?

I’ve been on the fence about purchasing a new vehicle, but one of my local dealerships has a huge sale going on, and I found a car I want to buy. I plan to trade in my current car, but it has a title loan. Can you trade in a car that has a title loan on it?

Answer
You must be excited to have found a new car you’re interested in purchasing! The good news is that more often than not, you can trade a car in with a title loan. However, the lienholder (title company) must be paid off before the title is legally transferred.
When you trade in a car with a loan, you are essentially selling it to the dealer, and they pay off the remaining balance. However, it’s not always the best option, especially if you have negative equity.
If you have negative equity in your car, also known as being upside-down loan, you should consider all options. In this situation, you can:
  • Include the negative equity in your new car loan and accept higher monthly payments.
  • Pay the difference in a lump sum and keep the monthly payments lower.
  • Wait to trade in the vehicle until the title loan is paid off.
If you’re looking for car insurance for your new vehicle, or you want to save money and make repaying the title loan more manageable, you should download Jerry.
Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!
Jack Walsh
Answered on Nov 29, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.
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