It is unlikely you can trade in your vehicle while 60 days past due on another car loan. Unless you pay cash for your new purchase, possible auto loan providers prefer that all accounts are up-to-date, so your loan application will likely be declined. You might be able to use a cosigner for a new loan, even if your current loan is past due.
Paying the Past Due Amount
You can avoid trade-in issues by paying off your past-due loan amount before applying for another car loan. You're likely to run into issues when financing while your account is past-due, so pay your lender as soon as possible. Once you've paid your lender, obtain a receipt. If you plan to work with a dealer to obtain financing, provide the dealer with your receipt. Any lender will want to see that you've brought your account current before determining whether to provide you with a loan.
Effects on Credit and Financing
Your credit score will drop when your payment is past due. Additionally, other creditors can view how many days you're currently late on your loan and how many times you've been late. For example, if your account is 60 days past due for the third time, your credit report will read "60 3" next to your loan account. You aren't likely to obtain another loan until you make your loan payment. If you do obtain financing, expect to pay a higher interest rate, which increases your car payment.
Using a Cosigner
A cosigner is someone who applies for a car loan with you. Your cosigner's credit history and credit score are used to secure your loan. If you can find a cosigner with good credit, you can likely obtain a loan approval, although finding a cosigner might not be easy. A cosigner is equally responsible for your car loan, so his credit is at risk if you fail to pay your loan payment. Even if declined for a loan on your own, you can reapply using a cosigner.
Paying Cash
If you're able to pay cash for your vehicle purchase, just let your dealer know that your loan account is past due. Your dealer will find out regardless, as a dealer representative must call your lender to obtain your total loan payoff amount. If your lender hasn't started the repossession process, the dealer will pay off your loan to accept your car as a trade-in. As long as the dealer can stop the repossession process, you can still trade in your vehicle.
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