WHEN SHOULD YOU NOT TRADE IN YOUR CAR?

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WHEN YOU SHOULD AND SHOULD NOT TRADE IN YOUR CAR

If the value of your vehicle is more than the balance remaining on your loan, you have equity. This equity can be applied toward the purchase or the lease of your next vehicle.

When you owe more on your loan than your vehicle is worth, however, there isn’t as much benefit to you in trading it in. Yet, if you find yourself in a situation where you need to get another car fast, you can still do a trade-in, even with an outstanding loan.

To get the greatest benefit from your trade-in, though, it’s good to keep your car for a few years after you’ve paid it off. You can enjoy the perks of ownership, while taking your time shopping for your next ride.

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SHOULD YOU TRADE IN TO BUY OR LEASE?

When you buy a car, you build equity in your vehicle. You also get the freedom to drive as many miles as you wish, so you can trek to Ithaca Falls, the Farmers Market, and beyond as often as you like.

However, if you like the idea of trading in your vehicle after just a few years of driving it, then you may want to consider a lease. You will essentially be going through the trade-in process every two to three years. You’ll pretty much always drive away in a sparkling new vehicle, with the most up-to-date amenities.

With leasing, down payment and monthly payments can be lower. This can open the door to more model and trim options. When your lease ends in a couple years, you simply take your car back to the dealership for an easy trade-in.

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