Can I Trade In My Car After One Year

(Bloomfield NJ )

Question: Can I trade in my car after one year? My current credit score is 655 and I financed a car last year but, I need a bigger car now and I haven't finished paying the one I have off.

Can I bring this one to the dealer and trade it off for another? Or, do you think that's not a good idea? Do you think I may be able to get a better APR (since my credit is better now than a year ago)??

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Answer: Sure you can trade in your car for a new one, but you may need money down since it's only been a year since purchasing your current one. This is because there may be negative equity in your current car.

You may have put quite a bit down originally or financed a very short term or paid extra each month to not have any inequity, but typically everyone is at least a little negative in the first year.

If you really need a different car, then by all means purchase another, but keep the negative equity you might have in mind as this might make it a bit challenging.

Having a 655 credit score puts you right in the C tier as far as credit goes and this is one of the toughest tiers for me to advise on, because there are so many variables.

If you are a strong C tier (a well paid car loan helps a lot here) and your credit has gotten better from your prior purchase, then there would be a good chance of getting a better APR.

Only problem here is I don't know what your current rate is, what your credit used to look like and what your credit is now, other than your score. As mentioned above credit in these ranges is very tough without knowing all the details.

Most customers I arrange financing for at the dealership I work for with a 655 credit score will get rates in the 9-14% range. However, sometimes rates are lower and sometimes they are higher. It's really a tough call here.

Hope this helps,
Justin