Many motorists who are on the market for a new vehicle won't be able to afford the purchase if they can't trade in their previous vehicle. If you're hoping to get a new car by leveraging your old vehicle for a trade-in, you'll want to be aware of any factors that might prevent you from being able to trade in your original vehicle.
The following four factors sometimes prevent car owners from trading in a vehicle:
Liens on the title
If you took out a loan to purchase your vehicle, there should be a lien on your title that indicates that a lender has ownership rights on that vehicle until you've payed off your loan.
Any dealer you work with is going to want to know the status of any liens indicated on your title. That's because the dealership is going to have to pay off the lien(s) when you turn over your vehicle. The dealer will deduct the leftover balance on your auto loan from any cash or credit towards another vehicle he or she offers you for the trade-in.
In some cases, a lien on a vehicle might be higher in value than the amount that the dealer is willing to give for the trade-in. In this case, trading in the vehicle will not be a good option.
A title in another person's name
You're going to have problems trading in a car if the car's title is not in your name. In this scenario, you have two options. The person in whose name the title is made out could sign over the title to the dealer so that you can trade in the car. Alternatively, you could have a title transfer done so that the title is made out in your name before you trade in the vehicle.
A lost title
The title on your vehicle proves that you are the lawful owner. If you've lost your title, you won't be to prove to the dealer that you have a right to sell the car.
The process for replacing a lost title will vary depending on your state, but in general it involves identifying the vehicle and connecting it with your lost title through your vehicle's VIN number.
Inability to pass inspection
A car that can't pass inspection could possibly be accepted by a dealer as a trade-in. However, the dealer is not likely to give you a good offer for your trade-in if it cannot pass inspection without some mechanical work.
Used car trade-in is a great way to get some cash for an old car, but the the law and economy dictate a few limitations on the kinds of cars dealers can accept. Most cars, however, will always fetch something.
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