How to Trade in a Car That’s Not Paid Off

August 10th, 2021 by

Tiny car with coins and finance paperwork

Choosing to upgrade your vehicle in Toledo is always an exciting time. From sleek sedans like the new Accord to family-friendly SUVs like the CR-V, there are plenty of automotive options available that will enhance your driving experience. One way that many drivers upgrade their vehicles is by trading them in. However, what if you haven’t paid off your auto loan? Can you still trade in a car that’s not paid off? In short: yes, you can make a trade-in, even if you still have a balance on your vehicle. However, there are some caveats you should consider before making this decision. Read this guide on how to trade in a car that’s not paid off with the finance experts at Victory Honda Monroe.

First, Retrieve Your Trade-in Value

When you begin the trade-in process, the first thing you need to do is find out how much your vehicle with worth. You can use our value-your-trade tool or one from a service like Kelley Blue Book to get an estimate of your current vehicle’s value. Keep in mind that this calculator will provide just an estimate, so once you get the vehicle appraised at a dealership, you can get a more accurate figure.

Does Your Vehicle Have Positive or Negative Equity?

After you have your vehicle’s trade-in value, this will let you know whether you have positive equity or negative equity. Here is what those terms mean:

  • Positive Equity: Your car’s value is worth more than what you owe
  • Negative Equity: Your car is worth less than what you owe (this is otherwise known as being underwater or upside down)

Bottom Line: You’ll have to compare your vehicle’s trade-in value with what you still owe on it to find out if you have negative equity or positive equity. If you have positive equity, you’re in a great position to trade in your Detroit driver. Although, drivers with negative equity aren’t totally out of options!

How to Trade in a Car With Negative Equity

If you’ve come to find that you have negative equity, here are a few ways you can potentially get behind the wheel of a new car:

  • Pay off the remaining balance: If your finances permit you to do so, you can pay off the remaining balance that’s still owed on the vehicle.
  • Rollover your existing loan into the new one: When “rolling over” a loan, the dealership will pay off the balance of your old loan. If this sounds too good to be true, it’s because it is. The outstanding balance will get rolled over into the new loan, meaning that you’ll have to pay for both the old and new loans at the same time. 
  • Consult different dealerships and negotiate: If you’re not pleased with the first trade-in offer, you can shop around and negotiate. You can also research what other Taylor-area drivers have sold their vehicles for to get a better offer.

Trade-in Your Car With Victory Honda Monroe

Now that you know how to trade in a car that’s not paid off, if you have any additional questions, contact us today! Our team of experts will assess your equity standing to help you determine which trade-in option is best for you. We look forward to working with you!


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