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Getting out of your car loan

Many times life circumstances change and the vehicle that made sense a year ago, or even a few years ago, doesn’t make sense now

We’ve seen this with a lot with Canadians with growing families who need a vehicle that is bigger. We also see it on the other side when a person is looking to get into something smaller and more fuel efficient.

Quite often you may still be making payments on the vehicle that you need to trade-in and that’s where Canadians have a lot of questions.

I’m still making payments on my car can I trade it in?

Yes. It is very common to trade-in a vehicle you are still making payments on.

I still owe more than the vehicle is worth, is that going to be a problem?

When someone owes more on the loan than the vehicle is worth that is referred to as having negative equity in their current vehicle. When you trade-in your vehicle we make sure the previous loan is paid off in full and the new loan is the only one you’re making payments on (even if you had negative equity).

How soon can I trade-in my vehicle?

You could trade it in the next day, but that’s not necessarily the best idea as trading cars very often can prove to not make the most sense financially.

What will the rate be on my next loan?

That will depend on the vehicle, term and your exact situation. What’s great is if you have been making payments consistently on your previous vehicle finance – you may qualify for a lower rate (usually takes 10 months+ of payments).


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