Can You Trade in a Buy Here Pay Here Car? Here’s What You Need to Know

You might wonder if you can trade in a car you currently have financing for at a buy here pay (BHPH) dealership for a new one. To put it briefly, you can change in a BHPH automobile, but there are a few considerations. So let’s look more closely before searching car dealerships open on sunday.

Negative Equity: The dealership typically gives you a trade-in value for your used car, depending on the car’s current market value. You have negative equity if you owe more on your vehicle than it is worth. This could be a concern when trading in a BHPH vehicle because these vehicles frequently have high loan rates, which could lead to negative equity.

Payoff Amount: You must know the payback amount before trading in your BHPH vehicle. This is your total debt for the car, including interest and other costs. In addition, you will be responsible for paying the difference between the trade-in value and the payout amount if you have negative equity.

Loan Acceptance: If you’re financing a new car and trading in your BHPH automobile, you must be accepted for a new loan. This can be harder for you if you have poor credit or a history of missing payments on your BHPH loan.

Dealer Policy: Not all dealerships will take trade-ins for BHPH vehicles. Some organizations might prohibit it, while others only accept fully paid-off BHPH vehicles.

Researching alternatives is crucial if you’re considering trading in your BHPH vehicle. For example, if you wish to minimize your interest rate and negative equity, consider refinancing your BHPH loan. Also, you can inquire about the policy of various dealerships to determine if they accept BHPH vehicles as trade-ins.

If you’re considering trading in your car, research a dealership that will work with you and your circumstances. Then, you may change in your BHPH car and get behind the wheel of a new vehicle with the appropriate strategy.