How to Trade in a Car That is Not Paid Off

Excited Couple Reviewing Trade in Offer with Salesman

We know that life doesn’t always go how you expect, so when you need to upgrade to a new vehicle and you’re not sure what to do with your current vehicle, it can be confusing. But the good news is you can trade in your vehicle, even if it isn’t paid off! If you’re unsure of the process or you want to learn more about how trading in your vehicle works, contact our finance center for more information!



Do You Have Positive or Negative Equity? 

To see how you can trade in a car that’s not paid off, you will have to first determine which of the two situations you are apply to you:

  • 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 calculate which equity you have, you’ll need to know how much you still owe on your current vehicle. You can check with our trade-in value calculator and see how much you are getting from trade-in offers. If the offer is less than the amount you owe, then it is negative equity. However, if it is more than how much you still owe, then it is positive. 

Having positive equity is obviously the ideal in this situation but the trade-in process stays more of less the same either way. However, if you have negative equity, you will need to consider your options and see which one will work best for your financial situation.

Trading in a Car with Negative Equity

For Whippany drivers who have negative equity, how do they trade in their car that’s not paid off? There are a couple of options available: 

  • Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
  • Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. However, transferring the amount to your new loan can increase the monthly payment and in the end, you will still be paying for a car that you traded in. In other words, this will make you upside-down in your new loan. If you can’t keep up with your current car payments and you are downsizing with a cheaper car, this could be the best option for you.

No matter which options you end up going with, we recommend you always read the contract carefully before signing a new car loan. 

Learn More About the Trade-in Process with Performance Auto Group 

If you still aren’t sure what the best course of action is for you, don’t hesitate to contact us. A member of our finance center team will be more than happy to help you find the right option for your budget and needs. So if you’re looking for even more savings, you can take advantage of our trade-in value calculator and we’ll help you learn how to trade in a car you still owe on. No matter what you choose, we’re excited to get you behind the wheel of a vehicle you’ll love.


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