How to Trade in a Car That is Not Paid Off

Trading in your car is a great way to lower the cost of your new vehicle. However, what if you’d like to trade in your car but you haven’t paid it off yet? San Jose drivers who want to trade in their cars that aren’t paid off have options, but the process may take a few more steps than usual. Read this guide by the finance experts at Capitol Acura to learn how to trade in a car that you still owe on. 

Does Your Vehicle Have Positive or Negative Equity?

If you’re interested in upgrading your Santa Clara commute by trading in your current car, you’ll need 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 find out whether you have positive or negative equity, you’ll need to find out how much you still owe on your current vehicle, how much your car is worth, and how much you’re getting from trade-in offers. You have negative equity if your trade-in offer is less than the amount you owe; you have positive equity if the offer is more than what you owe. 

You’re in the ideal position to trade in your car if you have positive equity. You’ll be able to trade in your current Milpitas vehicle without owing any more money, and you may even have some cash left over to put towards your new car! 

On the other hand, if you have negative equity, you’ll need to consider your options and figure out which one is best for your financial situation. 

How to Trade in a Car With Negative Equity

You’ve discovered that you have negative equity, so what should you do next? There are several trade-in options available for drivers with negative equity: 

• Make up the difference you still owe. If you’re in the financial position to simply pay the difference, you should do so. 
• Rollover the remainder of the old loan into the new loan. Many people who have negative equity opt to transfer the amount they still owe over the loan on their new vehicle. However, this option will increase your monthly payment and you’ll end up paying for a car that you traded in. In other words, this will make you upside-down on your new loan.
• Shop around for the best trade-in offers. Third-party used car companies, such as Carvana and Carmax, tend to appraise cars at higher prices, which might be able to help you not have negative equity anymore! You can also use third-party offers to help negotiate with other dealers and secure a battery offer. 

Learn More About the Trade-in Process with Capitol Acura

If you want to know more about how to trade in a car that is not paid off, or even how to sell a car at a dealership, make Capitol Acura your go-to source for guidance in San Jose! We work diligently with our customers to help them get the best trade-in offers possible and leave our lot in their desired automobile. Have any additional questions? Contact us at (855) 738-4869 today.