‘Money: It's Personal' — Rolling over your existing auto loan

SAN ANTONIO – It may be tempting to trade in your slightly used vehicle for the next shiny, new car on your wish list. But if you still owe money on your current auto loan, there are some steps you need to take before rolling over the loan on your new ride.

The Consumer Financial Protection Bureau said you'll want to find out how much you owe on your current loan. You should ask your lender for your payoff amount. This may be a different amount than what you see on your statement because your payoff amount may include a prepayment penalty or because of the way your interest is calculated.

The CFPB says you'll want to research the trade-in value of your vehicle so you can know if the amount you still owe is less than its value.

You can then decide if you want to pay off your existing loan before purchasing a new vehicle, wait until you pay off what you owe or include the amount you still owe in your new auto loan.

If you owe more on your current vehicle than it is worth and you decide to roll over the existing balance onto your new loan, it could make your payments much more expensive. You should also factor in costs for things such as taxes, gap insurance, maintenance plans or any other charges required or that you may want to add.

For more tips from the CFPB about rolling over your existing auto loan, click here.

“Money: It’s Personal” is a series on KSAT’s News at 9 that breaks down personal finance topics. If you have a suggestion or question about the types of topics you'd like us to explain, click here.

For more stories from KSAT's News at 9, visit KSAT.com/newsat9.


About the Authors:

Ivan Herrera has worked as a journalist in San Antonio since 2016. His work for KSAT 12 and KSAT.com includes covering breaking news of the day, as well as producing Q&As and content for the "South Texas Pride" and "KSAT Money" series.

Valerie Gomez is lead video editor and graphic artist for KSAT Explains. She began her career in 2014 and has been with KSAT since 2017. She helped create KSAT’s first digital-only newscast in 2018, and her work on KSAT Explains and various specials have earned her a Gracie Award from the Alliance for Women in Media and multiple Emmy nominations.