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Can You Trade In a Leased or Financed Car Early?

Excited Couple Reviewing Trade in Offer with Salesman

What are your options if you see a car you’d love to drive, but you’ve still got a ways to go on your current lease? How about if interest rates are much lower now than they were at the start of your lease term? Fortunately, you’re not locked into your lease until the end of the term! Most dealerships will allow you to turn in a lease early for a small early termination fee. 

In the guide below, the auto finance experts at Shepherd's Chevrolet Buick GMC will walk you through how to end a car loan or lease early, how to trade in a financed car, and how to refinance for a lower interest rate.

How To Trade in a Lease Early

Whether you go through with the full term or end your lease early, the process is pretty much the same. All you need to do is stop by our dealership near Wolcottville with the vehicle, and let us take care of the rest! Keep in mind that turning in a lease early may incur penalties, depending on your lease agreement. You may be expected to pay:

  • An early termination penalty, either as a flat fee or series of monthly payments.
  • The vehicle’s remaining depreciation.
  • The remaining balance on the lease.
  • The cost of any repairs needed to satisfy your lease agreement. 

How to Trade In a Financed Car

Even if you’ve financed your car, it’s still possible to trade it in when you still owe money on the loan. This is easiest when you have “positive equity”; if your car’s present value is more than the amount you owe, you can apply the difference toward the cost of a new car.

If you have what’s known as “negative equity” or are “upside-down” on your car loan, your car is worth less than what you currently owe. In this case, you’ll be required to pay off the difference when trading in a financed car. Your dealership may be willing to roll this added cost, along with the remaining amount on your loan, into a new loan. Before visiting your dealership, it’s a good idea to research your car’s current market value at Edmunds or Kelley Blue Book, or with our Value Your Trade tool.

How to Refinance a Car Loan

Interest rates tend to fluctuate, so you may notice that rates have gone down significantly since you applied for your car loan. So, is it worth it to refinance? Even a drop of just a couple percentage points can translate to major savings over the course of your loan term! Refinancing makes it possible to access those new lower rates while you pay off the remaining balance. You should consider refinancing your car loan if:

  • Recent improvements to your credit score might earn you a lower interest rate.
  • Interest rates have dropped since you took out your original auto loan.
  • You’re hoping to find another loan with a longer repayment period.

Value Your Trade with Shepherd's Chevrolet Buick GMC 

At Shepherd's Chevrolet Buick GMC, we strive to make car buying transparent and stress-free for drivers across Fort Wayne. Use our payment calculator tool to find a car in our pre-owned or new inventory that fits your monthly payment goals, or instantly value your trade online. Questions about trading in a financed car or ending a lease early in Albion? Contact us with your car-buying questions and we’ll be happy to assist!

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Main (260) 582-4478 Sales (260) 582-4478
550 W North St.
Kendallville, IN 46755
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Contact Us

Contact Us

Main (260) 582-4478 Sales (260) 582-4478
550 W North St.
Kendallville, IN 46755
What's My Car Worth?
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