Can I Trade In My Car with Bad Credit?

You may wonder if you can trade your car in with bad credit for one of the new Ram 1500 trim levels at Southern Chrysler Dodge Jeep Ram. In many cases, the answer is yes and in some instances, a trade-in might increase your chances of getting a new vehicle!

Why Do I Need a Down Payment with Bad Credit?

Traditional auto lenders will typically turn down those with bad credit because of the increased risk of the loan being paid back. Though subprime lenders specialize in high-risk loans, they require a downpayment to ensure the borrower has some interest in paying off the loan. Additionally, the less money loaned on the vehicle makes it easier for the lender to recoup their losses in case of repossession.

Most subprime lenders require those with a bad credit score to have a down payment or a cosigner to qualify for a car loan. The larger the down payment, the better rate you may qualify for on that new Ran 1500 Laramie you’ve been eyeing in Camden. Your odds of getting approved without a down payment are low. While many lenders require at least $1,000 or 10% of the vehicle’s selling price to qualify, a larger down payment will help you in the long run.

Over the years, the Southern Chrysler Dodge Jeep Ram finance department has built great relationships with numerous lenders for buyers who are trying to improve their credit scores!

Trading In a Car with Positive Equity

Fortunately, you can use the equity in your car as a down payment., If your vehicle is paid off or you have positive equity in your vehicle — the amount your car appraises for more than you owe — you can use that equity toward your down payment. That’s excellent news for Sheridan car shoppers looking for a Ram 1500 Big Horn.

Determining a Car’s Value

First, you must estimate what your car is worth. Check out websites like Cars.com, Edmunds, and Kelley Blue Book to find the trade-in value of similar cars in the Pinebluff area. Remember, the actual cash value of your vehicle can vary based on mileage, features, optional packages, and condition.

While these online resources will give you an idea of what your car is worth, you won’t know the actual cash value until you have it appraised at the dealership. Remember to bring printouts of the estimated trade-in value of your car so that you can get the most out of your trade toward one of your favorite Ram 1500 trim levels.

Additionally, a clean car with good tires and no major issues will bring a higher trade-in value than a car that appears to be neglected or abused. It may be beneficial to bring your car into the Southern Chrysler Dodge Jeep Ram service department ahead of time for an oil change or other service to take advantage of our multi-point vehicle inspection to check for any needed repairs. In some cases, you may be able to tackle some of the smaller repairs yourself and with the help of our parts department with advice as well as genuine Mopar parts.

Should I Trade In a Car with Negative Equity?

Negative equity is when your vehicle is worth less than you owe on it, Unfortunately, this won’t meet the requirements of a subprime lender for a down payment. There are things you can do. If you can bring enough cash to the deal to pay off the difference between what you owe and the value of your trade, as well as meet the down payment requirements, you can qualify for the loan.

Another option is to make larger payments on your existing car until you have enough positive equity in your car to meet the down payment. Remember, a car depreciates over time so you must be proactive in paying it down as quickly as possible. Especially if you want one of those new Ram 1500 trim levels at Southern Chrysler Dodge Jeep Ram in Camden.

Why Choose Southern Chrysler Dodge Jeep Ram for Financing?

Now that you know it’s possible to trade in your car with bad credit, contact our finance department or stop by if you have any questions. And don’t forget to fill out an online application before you head down.