How to Trade in a Car That is Not Paid Off

Excited Couple Reviewing Trade in Offer with Salesman


If you’re in the market for a vehicle upgrade like the new INFINITI, you may be considering trading in your current automobile. However, if you still have a balance on your current vehicle, can you trade in a car that’s not paid off? It is possible to trade in a car that’s not paid off, but there are quite a few steps involved. Read this guide by the finance team at INFINITI of Warwick to learn how to trade in a car you still owe on. Then, check out more of our car buying tips to discover when is the best time to sell a car and how to trade in a car.



Do You Have Positive or Negative Equity?

Before deciding to trade in your car that’s not paid off, you’ll want to figure out if you have positive equity or negative equity. Positive equity is when your car is worth more than what you still owe, whereas negative equity is when your car is worth less than what you still owe.

To calculate which kind of equity you have, you’ll need to find out how much you still owe on your current vehicle, the value of your car, and how much you’re receiving from trade-in offers. If the offer is less than the amount that you owe, you have negative equity. Although, if the offer is more than how much you owe, you have positive equity.

Trading in a Car With Positive Equity

Providence drivers with positive equity are in the most ideal position to trade in their vehicles. If you have positive equity, you’ll be able to trade in your current Coventry driver without having to worry about a remaining balance, and you can even put the extra money towards the new car!

Trading in a Car with Negative Equity

If you have negative equity, can you trade in a car that’s not paid off? There are several ways that you can trade in your vehicle that has a remaining balance:

  • Once you receive the trade-in offer, make up the difference you still owe. If you have the cash to spare, this is the most ideal option.
  • Rollover the existing loan amount into the new loan. Some Cranston-area dealers will pay off your old loan, however, you are still responsible for this balance. That old loan will get rolled over into the new loan, so you will have to pay both simultaneously. As a result, you’ll have a higher monthly payment, and it will make you upside-down in your new loan.
  • Work with a third party to see how their trade-in offers compare to the ones you’ve received from local dealerships. Third-party used car companies, such as Carvana and Carmax, typically appraise vehicles at higher prices, which might help you get out of negative equity.
  • Negotiate with the initial dealership you went to if you still have negative equity with a higher appraisal value. Give them the offer you received from the third-party company and ask them to match it. If they’re unable to match the offer, you can try to ask the dealer for the value of the difference you still owe. This way, you can sell your car outright to a third-party company while having the difference transferred to your new loan.

No matter which option you choose, we recommend that you always read the contract before signing a new car loan.

Learn More About the Trading in a Car with INFINITI of Warwick

If you still have questions about how to trade in a car you still owe on, reach out to our finance experts for assistance. Our team will help you find a trade-in option that best suits your budget!


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