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Posted in Auto Loans
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jmb812

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High interest rate car loan. Pay it off in full or trade car in and take a loss?

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Pay it off in full= Saving Money

Trading Car in & taking loss= Losing Money

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If your plan is to get rid of the car, and buy another, if you can sell the car outright for higher than a trade in would be, that would be best.  But you would most likely have to have the extra cash available to cover the rest of the loan if the car is currently upside down.  I would assume that buyer would want to have a title without a lien.  

Trading it in, lenders are used to people trading in cars that are upside down.  WIth loans that can last over 72 months, they probably see that a lot when someone gets tired of a car after 3-4 years.  And, if you could put plenty down so the car was never upside down, you probably wouldn't need a loan that long.

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