Doug's Credit Center Blog

Can I Trade in My Car with Bad Credit?


When you want to take out a new car loan, trading in your car is one of the steps you can take to make the process more efficient. Instead of taking money out of your savings account, you can often use the old car as a down payment. However, you might be wondering if you can trade in your car with bad credit?

The Value of The Car

The value of your vehicle is going to depend upon several different factors. They include:

  • How old the car is
  • The condition the car is in
  • The number of miles the vehicle has on it

When you are able to get a higher trade-in value for your vehicle, your credit scores will not matter quite as much. To answer your question of, “Can I trade in my car with bad credit?” Yes, you can, but it depends on other factors.

If You’re Adding in More Money

Now, let’s say that you want to trade in a car valued at $500, and the overall price of the new car you want is $27,000. If you have low credit scores, it will be hard to get approved on this loan. However, when you
are adding in more money to the down payment, then you have a better chance of approval. Basically, with bad credit car financing, you want to put as much money down as possible to offset your scores.

The Monthly Payments

The price of the monthly payments is going to have an impact on your ability to qualify for the loan. The lenders want to know that you are able to afford them and failure to pay your current bills may be an indication that you are not. Choose more affordable vehicles to increase your chances of qualifying.

Dealing with bad credit scores can be burdensome when you want to do a trade-in on your vehicle. However, the success of the trade-in is going to depend upon other financial factors in your life as well.


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