How to Trade in a Car That Is Not Paid Off

Line of Cars in Traffic


Are you familiar with the trade-in process offered at Patriot Chrysler Dodge Jeep RAM of Chandler, where local drivers can sell their vehicles to put towards a down payment on a newer model or for cash? Interested in learning how to trade in a car that’s not paid off yet? We’ve streamlined many aspects of the trade-in process, however, if you still owe money on your vehicle, there may be a few extra steps you have to take. Wondering how to trade in a car you still owe on? The finance team at our Chandler dealership have the answers for you below!



Do You Have Negative or Positive Equity?

Before you learn how to trade in a car that is not paid off, you first have to learn whether you have positive or negative equity:

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

To determine whether you have positive or negative equity, you’ll have to figure out:

  • How much do you still owe on your current vehicle
  • How much the car is worth according to vehicle appraisal sites like Kelley Blue Book®or Edmunds
  • How much you have received in trade-in offers

If the offers you’ve received are higher than the amount you still owe on your vehicle, you have positive equity. However, if the offers you’ve received are lower than the amount you own on your vehicle, then you have negative equity.

You’re in the most ideal position during the trade-in process if you have positive equity, as you’ll be able to sell your car without owing any outstanding balances. If you have negative equity, your trade-in situation is much trickier, and you’ll have to consider the following options based on which is most optimal for your financial scenario.

How to Trade In A Car with Negative Equity

If you’re a Oklahoma City driver with negative equity, there’s no reason to feel down, embarrassed, or disappointed – plenty of vehicle owners currently have negative equity. But the question still remains: how do you trade in a car you still owe on? You have a few options available to you:

  • Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
  • Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. However, transferring the amount to your new loan can increase the monthly payment and in the end. You will still be paying for a car that you traded-in and this can make you upside-down in your new loan.
  • If those two options aren’t for you, then you should work with a third party and see how their trade-in offer compares to the ones you have gotten from your local dealerships. Third-party used car companies, such as Carvana and Carmax, tend to appraise cars at higher prices, which might be able to help you avoid negative equity.
  • If you still have negative equity with a higher appraisal value, then negotiate with the initial dealership you went to. Provide them with the offer you got from a third-party company and ask them to match it. If they cannot match it, you can try to ask the dealer for the value of the difference you still owe, so you can sell your car outright to the third-party company while having the difference transferred to your new loan.

Find Out More About How to Trade in a Car That’s Not Paid Off with Patriot Chrysler Dodge Jeep RAM of Chandler

If you have any lingering questions about how to trade in a car you still owe on, there’s no reason to fret! Just contact us at Patriot Chrysler Dodge Jeep RAM of Chandler to find out more about finance and insurance information, our Value Your Trade calculator, and our available payment options. Above all else, it’s important to keep in mind that if you still owe money on your current vehicle, sometimes it’s better to just wait until you finish paying off the car already in your possession!

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