How To Trade In A Car That’s Not Paid Off?

Do you have a current vehicle with a remaining balance on the auto loan, but you want to trade it in? While this isn’t as common as trading in a car that’s been paid off, this is definitely a tactic that some drivers in Ann Arbor have used for different reasons. Whether you are trying to manage your finances better or you think it’s time for a new car, learn how to trade in a car that’s not paid off from the finance experts at Victory Toyota of Canton today!

Trading In a Vehicle With Positive or Negative Equity

The process on how to trade in a car that’s not paid off will depend largely on whether you have positive or negative equity. First, find out the estimated trade-in value of your car based on the trusty Kelley Blue Book® values. Then, scout for offers you can get from dealerships near Detroit. With that, subtract the offer from the loan amount you still owe on the car and if you get:

• Remaining loan balance – This means your car is worth less than what you owe on the loan and therefore, you have negative equity.
• Negative or no remaining payoff amount – This means your car is worth more than how much you owe, so you have positive equity.

Now that you know if you have positive or negative equity, what do you do? See below for a general idea:

• With positive equity, the steps you need to take to trade in your car are pretty straightforward as they are awfully similar to the steps you would take to trade in a car with no balance. If the trade-in price covers more than the amount you owe, you will even have some money left!
• Paying off a car with negative equity will be different as it will require different steps depending on what you opt for next. Read on to find out below.

Trade-In With Negative Equity Near Dearborn

If you have negative equity, you are probably wondering how to trade in a car that’s not paid off. You have the following options if you still think it’s a good idea to trade in your vehicle that you still owe money on:

• What’s keeping you from having positive equity is that you will still owe money even after applying the trade-in cost to your loan. A simple way to get you to the other side is to pay for the outstanding difference.
• If you can’t afford to make up the difference directly, then you can consider rolling over the amount to your next loan as most drivers with negative equity do. However, this option may be detrimental to your financial health as you will be upside-down in your new loan and you might struggle to pay higher amounts every month.
• You can also reach out to third parties and see if you can get higher offers as they usually give a higher estimate than dealerships. If a third party like Carmax or Carvana makes a higher offer, then you will have positive equity and you can sell your vehicle to them.
• Even with a higher offer, if you still have negative equity, you can go to the dealership you went to previously to match the offer. They can’t match it? Ask for a check of the difference, so you can sell the car outright to the third party while having the remaining loan balance added to your new loan. This way, you won’t miss out the best offer you get in the Southfield area.

Whichever way you opt for, we want to remind you to always read the contract carefully, so you are aware of the loan term and interest rate, and you are confident you can make the monthly payments. If you can manage your next car loan better, you won’t have to worry about how to trade in a car that’s not paid off the next time around!

Switch Your Vehicle Today at Victory Toyota of Canton

Excited to take a new Troy ride home? Stop by our Canton location and we can get the process started. Contact us if you have any questions or need advice on your particular situation!