How to Trade in a Car That is Not Paid Off

Tiny car with coins and finance paperwork

Many Richmond drivers have asked us about how to trade in a car that is not paid off. That’s because while the trade-in process is pretty easy when the car is entirely paid off, the process has a few more steps if it’s not paid off. So how do you trade in a car that you still owe on? Learn how here from the finance pros at Whitten Brothers Automotive, and contact us to get started. 

Do You Have Positive or Negative Equity? 

When learning how to trade in a car that’s not paid off, you must start by determining which of these two situations apply to you:

  • Positive equity: Your car is worth more than the balance you still owe on it
  • Negative equity: Your car is worth less than the balance you still owe on it

Find Out What Your Car is Worth and How Much You Owe

Call your loan company in Ashland to find how much you still owe on your current car. Then, research to see how much your car is worth according to Kelley Blue Book® or If you owe more than the car’s value, you have negative equity. However, if it is more than you still owe, you have positive equity. 

Positive equity is the ideal situation because the trade-in process is fairly straightforward. You can trade in your current Fredricksburg vehicle without owing anything and even use the funds toward your next new or pre-owned car! But, if you have negative equity, check out your options below to learn which one may work best for your financial situation.

Trading in a Car with Negative Equity

For those Richmond drivers who have negative equity, there are a couple of options available: 

  • Make up the difference you still owe after accounting for the trade-in price. This is the best-case scenario because it can make the process easier. Still, not everyone has enough money in savings to do this.
  • Transfer the amount you still owe to your new loan. When it comes to how to pay off a car you still owe on, this is the most common scenario. Whatever amount you still owe can be tacked on to your new loan. Yes, you’ll be upside down on your new car, and essentially, you’ll still be paying off your old car as well as your new one. But if you can’t keep up with your current car payments and want to downsize to a cheaper car, this could be a viable option.

Of course, you also have the option to wait until you pay off your car to get a new one. Regardless of the route you choose, please read the contract carefully before signing it! Unfortunately, not all dealerships are as trustworthy as Whitten Brothers Automotive. 

Trade-in Your Car to Whitten Brothers Automotive Today

If you still have questions about how to trade in a car that is not paid off, please reach out to the finance specialists at Whitten Brothers Automotive so we can help you! You can start by completing a finance application and getting a value for your trade-in using our trade-in value estimator. What are you waiting for? Contact us today!

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