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

Tiny car with keys
 

When you trade in a car around North Canton and Canton, you can generally opt to put the money towards a new car or take a cash payout. But, what do you do when your car isn’t fully paid off yet? Learning how to trade in a car that’s not paid off is possible, but there are a few things to keep in mind. Find out all about your options with help from the Serra Mazda finance team, and get personalized advice in Akron. 

Positive vs. Negative Equity

Starting off, do you have positive or negative equity currently?

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

Not sure? Get an estimate on your car’s current value. You can look up the Kelley Blue Book® values online or use our value your trade tool. Compare it to the amount that you still owe on your vehicle. If you have positive equity, you’ll be able to trade in your car for a new model without owing anything. If you have negative equity, read on to explore your options.

Trading in a Car with Negative Equity

Next, how do you trade-in your car with negative equity in Hudson? You have a few different methods:

  • Make up the difference. This is the easiest solution if you have cash to spare. You can simply pay the extra money to get out ahead in the end.
  • Transfer the amount you still owe. If you’re not in a position to pay off the old loan, then you can rollover your old loan into the new loan. The downside is that this will increase your monthly payments, and you’ll be paying for both your previous and current car at the same time. But if you’re downsizing to a cheaper vehicle, this can be a good option.
  • Work with a third party. Third-party used car companies, like Carvana and Carmax, tend to appraise cars at higher prices. When you take advantage of the higher trade-in values there, it might be enough to get you out of negative equity.
  • Negotiate with the dealership. If you have negative equity with a high appraisal value, you can try to negotiate. Show the third-party appraisal value and ask for a price match. If they can’t, you can ask the dealer for the value of the difference you still owe. Then, sell your car to a third-party company and have the difference transferred to your new loan. 

Explore Your Financing Options with Serra Mazda

Learning how to trade in a car that’s not paid off can seem intimidating, but our financing team will make sure that you get through the process with ease. Contact us today with any questions or stop by our dealership to learn more!

 

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