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How do I get out of a used car loan?
I have two years left on my used car loan, but I already want a new vehicle. Is there any way to get out of this loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You can’t get out of the
car loan
by simply walking away from it, but you have options if you want a new vehicle and you still have a loan. However, this is almost 100% dependent on your current equity.If you have positive equity, or owe less on the loan than the car is worth, you can either trade the car in or
sell the car
. You then use this money to pay off your loan and pocket the rest (or use it as a down payment).If you have negative equity, the situation becomes a bit more complicated. If you trade the car in or sell it, you’ll still owe money on the leftover balance of your loan. From there, you can either roll this balance into the new loan, which can put you upside down for quite some time or you can pay this loan off separately. Neither is a particularly enviable scenario, so you may want to consider breaking even on your car loan before you decide to get a new one.
Whichever method you choose, you can ultimately find savings in your car insurance. Use the
Jerry
app to compare quotes and save money to pay down your loan. Hopefully, you can hop into a new car before you know it.View full answer
- Gregory R.
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