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Can you trade in a car with a title loan?

My car is just short of hitting 150,000 miles, and I want to trade it in for a new vehicle before its value decreases more. However, I used it to get a title loan not long ago. Can you still trade in a car with a title loan on it?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Most dealerships will let you trade in a car with a title loan.
If you
trade in a car with a loan
, the dealership will pay off the remaining balance, but whether or not it’s in your best interest depends on the circumstances of your loan.
If your loan balance exceeds the value of your vehicle: You have negative equity, also known as an
upside-down car loan
. If you have negative equity, trade-in options include:
  • Roll the negative equity of your old loan to your new car loan, although your monthly payments may increase.
  • Pay the difference between the loan balance and the vehicle’s value and decrease the monthly payments.
  • Postpone trading in the vehicle until the title loan is completely paid off.
If the value of your car exceeds the remaining balance of your loan: You have positive equity in the vehicle and should not hesitate to trade it in. You can apply the surplus balance to your new purchase as a down payment and lower the monthly payments of your new
car loan
.
MORE: What to do after buying a new car
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