How to Trade in a Car That is Not Paid Off

Excited Couple Reviewing Trade in Offer with Salesman


The trade-in process is easy and straightforward when the vehicle is paid off. However, what happens when you want to trade in a vehicle that still has a balance? There are a few more steps in the process when trading in a vehicle that is not paid off. Let’s learn how to trade in a vehicle that is not paid off with the Voss Honda finance center below. For more information, contact us anytime!

Positive or Negative Equity

The first thing to do when learning how to trade in a vehicle that is not paid off is to determine whether you have positive or negative equity:

  • Positive equity: your car is worth more than what you still owe
  • Negative equity: your car is worth less than what you still owe

To figure out exactly which type of equity you have on your vehicle, you need to know how much you owe and the amount you’ll receive through your offer after appraisal. If the offer you receive is less than what you still owe, you have negative equity. If it’s more than what you owe, you have positive equity.

When learning more about how to trade in a car you still owe on, you’ll see it’s better to have positive equity in this case, as the entire process is much more straightforward. You can just trade into a local Tipp City dealership without any previous balance, and you can put the value of your trade toward your new vehicle. 

On the other hand, if you’re in a situation where you have negative equity, it’s important to decide what will be best for your future financial goals. 

How to Trade in a Car With Negative Equity

If you are a Troy driver who does have negative equity, let’s check out a few options that you could use:

  • Make up the difference you still owe after factoring in your trade-in price. The first option is to make up the difference, including your trade-in price. This is best if you have some spare funds you can allocate.
  • Transfer the amount owed to a new loan. This is the most popular option when Tipp City drivers have negative equity. It’s important to note that transferring the amount to a new loan has the potential to increase your monthly payment. In this case, you would still be paying for the vehicle you’ve already traded in, and be upside down on your loan. This is often the best option if you are purchasing a car that is less expensive than your trade. 
  • Consider a third party. Many Tipp City drivers consider seeking out a third party to get an appraisal, like Carmax or Carvana, as you will likely receive a higher appraisal, avoiding the negative equity. 
  • Negotiate with the original dealership. If you went to a third party, you can return to the original dealership and see if they will match the third party’s appraisal. If they don’t agree to this, you could also ask for the value of the difference owed. This will allow you to sell your vehicle to a third party entirely, and the difference could be added to your new loan. 

Come See Voss Honda to Trade in Your Vehicle!

Now that you know how to trade in a car that is not paid off, come visit Voss Honda for your appraisal! If you’re in the market for a new vehicle, you can apply for financing to start the buying process. Be sure to use our new vehicle specials to save on your next car around Sidney!

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