How to Trade in a Car That Is Not Paid Off

If you’re interested in making some extra money to put towards your next Overland Park ride, you might be considering trading in your current vehicle. A lot of drivers trade in their vehicle to either exchange for a new car or to get a cash value, and the process is usually quite easy and straightforward. But what if you still owe money on your current vehicle? Can you trade in a car that isn’t fully paid off?

The short answer is yes, but it depends on a few factors. The finance team at Olathe Dodge Chrysler Jeep Ram has more information on how to trade in a car you still owe on in the guide below – check it out!

Do You Have Positive or Negative Equity? 

The first step to seeing if you can trade in a vehicle you still owe money on is to determine whether you’re in positive equity or negative equity. Here’s what those terms mean:

• When you’re in positive equity, you owe less than your vehicle’s current value
• When you’re in negative equity, you owe more than your vehicle’s current value

You can estimate your vehicle’s current worth with our Value Your Trade tool on our website. All you have to do is plug in some key information about your vehicle and we’ll be able to give you a general idea of your car’s value. 

If you find that you’re in positive equity, you’re in the best shape to trade in your car. While you won’t get as much for your vehicle as if it was fully paid off, you’ll still walk away with some extra cash to put towards your next ride–or whatever else you want! If you’re in negative equity, the process is a bit more complicated, but you still have options if you want to trade in your car. Read on for the details on how to trade in a car that is not paid off.

Trading in a Car with Negative Equity

If you’ve calculated the value of your car and find that it’s less than what you currently owe, you’re in negative equity. It’s harder to trade in a car with negative equity in Gardner, but it isn’t impossible. Here are four options you can take:

• Make up the difference you still owe. The easiest way to get a new vehicle with no remaining money on it is to pay the difference out of pocket. However, not every driver has enough spare cash to take this option, so be sure to carefully review your financial situation before making any concrete decisions. 
• Transfer the amount you still owe over to a new loan. If you can’t pay out of pocket, you should be able to roll the amount you owe on your current vehicle into a new loan. This will increase your monthly payments and essentially mean you’re upside-down on your new loan from the start, but it does mean you can trade in your vehicle before it’s paid off and upgrade to something new. However, if you’re downsizing to a more affordable option, your monthly payments may end up being less than what you’re currently paying even with the added amount!
• Compare trade-in offers with a third party. If you think you might be able to get a better deal from a third-party company such as Carvana or Carmax, work with them to see if they can appraise your car at a higher price. This may decrease the amount of negative equity you’re in, or remove it completely. 
• Negotiate with the initial dealership. If you’ve gone to a third-party company and gotten a better deal, return to the initial dealership and see if they’ll match the new value.

Learn More About the Trade-in Process with Olathe Dodge Chrysler Jeep Ram 

If you have any remaining questions about how to trade in a car you still owe on, feel free to contact our office! You can also stop by our dealership near Springhill to talk to a member of our finance team in person, and we’ll be happy to offer more car-buying tips to help you out.