How to Trade In A Car That Is Not Paid Off

Trading in your current vehicle at a dealership is a great way to get a bit of money to put towards your next Dalton ride! If you’re in the process of paying off your car and still owe money on it, you might be wondering if and when you can trade it in for a new model. Fortunately, it’s possible to trade in a car that’s not fully paid off! There are a few more steps, depending on your financial situation, but it’s perfectly viable to trade in a vehicle that you still owe money on. The finance team at Riverside Chevrolet of Rome has everything you need to know in the guide below.

Positive & Negative Equity

If you want to trade in your car but it’s not fully paid off, the first thing you have to do is calculate whether you’re in positive or negative equity. This means:

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

It’s easy to calculate whether you’re in positive or negative equity; all you need to know is 1) the amount you still owe on your vehicle, 2) how much the car is worth according to a third-party estimate, and 3) how much you’ll get from a trade-in offer. If you add everything up and the offer you get is greater than the amount you still owe, then you’re in positive equity. If the offer is less than the amount you still owe – in other words, if you’ll still owe money after you trade the car in – then you’re in negative equity.

If you calculate everything and find that you’re in positive equity, then the trade-in process is pretty straightforward. You can trade in your vehicle without owing any more money and have some money left over to put towards your next ride!

Trading in a Car with Negative Equity

If you’ve done your calculations and find that you’re in negative equity, you can still trade in your vehicle. You just have to decide between a few different options:

• Make up the difference you still owe. While this is the most straightforward option, not everyone has the spare cash to immediately pay off the rest of the amount you owe. If you do, however, it will leave you in a much better financial position when trading in.
• Transfer the amount you still owe to a new loan. You can add the amount of money you still owe on your current vehicle into your new vehicle’s loan. This increases your monthly payment amount and puts you upside-down in your new loan from the start, so be sure to carefully consider your financial situation before choosing this option.
• Get an appraisal from a third-party company. A third-party company could appraise your current vehicle at a higher price than the dealership – sometimes at a price that would put you in positive equity.
• Negotiate with the initial dealership. If you’ve gone to a third-party car company and gotten a better offer, you can return to your initial dealership and present them with the better offer to see if they’ll match it.

Learn More About the Trade-in Process with Riverside Chevrolet of Rome

If you want to learn more about how to trade in a car that you still owe on, feel free to contact our office anytime! Our finance team is happy to answer any questions or give you more information about the trade-in process. You can also stop by our dealership to talk to a finance expert in person, or check out our inventory of new and pre-owned vehicles – we’re conveniently located near Rockmart and Adairsville!