How do I transfer my car loan to a different vehicle?
I want to get a new car, but I still have a loan on my old car. Can I transfer this loan to the new vehicle? How do I do it?
While you technically can’t transfer a car loan from one vehicle to another, you can do several things to take care of your old loan while getting a new loan.
You have two main options: sell your car or trade it in, then use the proceeds to pay off the loan. However, this only works if you have positive equity in your car or your car is worth more than you owe. In both cases, you sell the car or trade it in, pay off the old loan, and use the proceeds for a down payment on your new car.
If you have negative equity, or you’re upside down on the vehicle, you still have these two options. However, both scenarios will leave you with a leftover balance on your car loan. In this case, you can either:
- Roll the balance of the old loan into the new one, although this may put you further upside down.
- Pay off as much of the balance as you can and then get another loan to pay off the remaining balance.
In any scenario, you still need to maintain full coverage car insurance as most lenders require it. So whether you want to pocket a bit of extra cash or pay down your old car loan, shop around for car insurance with the Jerry app. Jerry gathers customized quotes from 50+ insurance providers in just minutes to find you the best rates and coverage. The average Jerry user saves $879 a year!
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