Refinancing vs. Trading in a Car: How to Decide

If you have been late on your car payments or want to lower your interest, you could choose to refinance or trade in your vehicle. Keeping up with car payments shouldn’t be a monthly worry, and if you are facing repossession, taking these steps before it’s too late can prevent late payments or a repossession from hurting your credit.

If you trade in your vehicle, you can purchase a car that doesn’t cost as much to lower your payments and fit your budget. It’s important to figure out the value of your vehicle first so that you can take your car in for a better trade-in offer. The best time to trade in your vehicle is when you have equity. If you have been paying on your car, then you can use that equity to purchase another vehicle when you trade in. The dealer will pay off your loan in most cases to get back the newer car in exchange for the lower-cost car.

Refinancing is the second option, which is available to those who want to lower car payments and have a higher credit score than when they originally purchased the vehicle. However, you may end up paying more. You can stop by Kia of Laurel to see the options for trading in your vehicle or refinancing.

 

 

Categories: Finance