How to Trade in a Car That’s Not Paid Off

If you’re interested in upgrading your %%target_city_1%-commuter vehicle, you’ve probably considered trading it in for a new ride. Trading in a car is a fairly simple process, but what happens if you haven’t paid off your loan? Is it still possible to trade it in? In short: yes, you can trade in a car that’s not paid off, but there are some caveats that you should consider. Read on with the finance experts at Tower Honda of Longview to learn how to trade in a car that’s not paid off.

First, Find Out How Much Your Vehicle is Worth

When you begin the trade-in process, you’ll first need to find out how much your vehicle is worth. You can use our value-your-trade tool, or one from a service like Kelley Blue Book to get an estimate on the value of your current vehicle. This calculator will simply provide you with an estimate, so it’s important to remember that only once your vehicle has been physically inspected that the dealership will be able to establish exactly how much it’s worth.

Does Your Vehicle Have Positive or Negative Equity?

After you’ve retrieved your vehicle’s trade-in value, this will let you know whether you have positive equity or negative equity. Here is what the respective terms mean:

• Positive Equity: Your car’s value is worth more than what you owe
• Negative Equity: Your car is worth less than what you owe (this is otherwise known as being underwater or upside down)

To determine if you have negative equity or positive equity, you’ll need to compare your vehicle’s trade-in value vs. what you still owe on it. You can find the amount that you still owe on your monthly statement. If your trade-in value is more than what you owe, you have positive equity. On the other hand, if your trade-in value is less than what you owe, you have negative equity.

Drivers with positive equity are in a great position to trade in their Marshall ride for something new! However, if you have negative equity, you’re not totally out of options.

How to Trade in a Car With Negative Equity

There are a few ways you can potentially get behind the wheel of a new car when trading in a vehicle with negative equity:

• Pay off the remaining balance: If you’re in a good position with your finances, you can pay off the remaining balance that you still owe on the vehicle.
• Rollover your existing loan into the new one: When “rolling over” a loan, the dealership will pay off the balance of your old loan. Sounds too good to be true? It is. While the dealership is taking care of your existing loan upfront, you’ll still be responsible for the balance since it will be rolled into the new loan. As a result, you’ll be paying for the old and new loans simultaneously. 
• Consult different dealerships and negotiate: If you’re not pleased with the first trade-in offer, you can shop around and negotiate. You can find out what other Gladewater-area drivers have sold their vehicles for to secure a better offer.

Trade-in Your Car With Tower Honda of Longview

Now that you know how to trade in a car that’s not paid off if you have any additional questions, please feel free to contact us today! Or, stop by our dealership in Longview to browse our inventory of new and used vehicles to find a suitable upgrade.