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Will a car dealership pay off a title loan?
I’ve been shopping around for a new car but have been holding out for the perfect vehicle. Thankfully, I think I finally found it. I want to trade in my current car, but I had a family emergency and took out a car title loan a few weeks ago. Will a car dealership pay off a title loan on my behalf?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear about the family emergency, but you must be excited to have found the perfect vehicle. Plus, I’m happy to say a car dealership will pay off a title loan in most situations!
If you have positive equity in your vehicle, meaning your car’s value is worth more than you owe, the dealership almost always pays off the title loan and takes care of all the paperwork for you. Additionally, the lender will apply any value in excess of what you owe on the title loan to the new purchase as a down payment and help lower your monthly payments.
If you owe more on the title loan than your vehicle is worth, you are in an
upside-down loan
and have negative equity. The dealership may still pay off the title loan, but the difference in what you owe and your trade-in value will usually roll over into your new car loan
.Hopefully, you have positive equity in the vehicle and can trade it in to save some money on your new car! Remember that once you get the title loan paid off and your trade-in squared away, you need
car insurance
to take your new, perfect vehicle home.If you’d rather leave the hard work of gathering quotes to someone else, use
Jerry
. The Jerry app collects quotes from 50 top insurance companies like Travelers, Nationwide, and Progressive. And if you ever have any questions, agents are just a text away!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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