How to Trade in a Car That is Not Paid Off?

Excited Couple Reviewing Trade in Offer with Salesman


In the past, you’ve likely sold your car on the open market or to a dealership before making an upgrade. While this process of selling or trading your car is simple when you own the car outright, it can get a bit more complicated when you’re still carrying a loan balance. So, how do you trade in a car that is not paid off? Below, the Apostolakis Honda finance team will explain how to trade in a car you still owe on, so you can upgrade your Warren travels!

Do You Have Positive or Negative Equity?

First, when learning how to trade in a car that is not paid off, you’ll need to evaluate which of these two situations apply to your loan:

  • Positive equity: your remaining loan is less than the value of your vehicle
  • Negative equity: your remaining loan is more than the value of your vehicle 

To figure out what type of equity you have, you’ll need to know the balance of your vehicle’s loan and its current value. You can use our trade-in value tool to get a strong estimate of your car’s worth. If your trade-in estimates are less than your loan balance, you have negative equity. If your trade offers are more than the balance of your current loan, you have positive equity. 

If you have positive equity, you’re in the most ideal possible position for trading in your vehicle. This makes the process simple, as you can easily pay off your loan with the profit from your sale. On the other hand, if you have negative equity, you’ll need to carefully consider your options to discern what suits your needs. Luckily, our Apostolakis Honda finance team is here to offer the guidance you deserve. 

Trading in a Car with Negative Equity

If you’re like other Boardman drivers with negative equity, you can still learn how to trade in a car that is not paid off. Options for moving forward include:

  • Make up the difference you still owe after accounting for the trade-in price: This is the most straightforward option and certainly one to consider if you have the spare cash. However, if you don’t have the budget for this option, you can explore other ways to learn how to trade in a car you still owe on below.
  • Transfer the amount you still owe over to a new loan: This is the most common option when looking to upgrade your ride, despite having negative equity. In this scenario, the dealer will pay off your loan balance for you and apply what’s left after your trade to your new loan. This will increase your new bill, but you can use this option to both get a newer vehicle and work towards paying off your old loan simultaneously. 
  • Shop around for trade-in offers: Be sure to shop around for different trade offers. Whether you go to a variety of dealers or work with a third party like Carmax, you may find someone who is looking for your exact car to add to their inventory! 
  • Negotiate with the dealership: If you’ve done your homework, you can head to the dealer with a variety of loan offers to help in your negotiations. 

Learn More About the Trade-in Process with Apostolakis Honda 

Have lingering questions about how to trade in a car you still owe on? If so, get in touch with Apostolakis Honda today to secure the best financial guidance around. Our team is committed to helping you hit the Youngstown streets in a vehicle you can confidently afford.

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