How to Trade in a Car That is Not Paid Off

The trade-in process at Rumson-area dealerships like Land Rover Monmouth is fairly simple and straightforward if the vehicle in question is fully paid off. So, how do you trade in a car that’s not paid off? It is possible, but there are a few things you should know before you attempt to trade in a financed car. This guide from the experts in our finance center will explain how to trade in a car that you still owe on. Whether you are looking to upgrade to an exciting new Land Rover or wish to sell your vehicle to us outright, you’ll get the best deal possible at our dealership in Eatontown.

Do You Have Positive or Negative Equity? 

The first step in learning how to trade in a car that is not paid off, is to determine whether you have positive or negative equity in the vehicle. Here’s what that means: 

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

To calculate which equity you have, you’ll need to take a look at how much you still owe on the vehicle, the car’s Blue Book® value, and what kind of trade-in offers you receive. If the offer is less than the amount you currently owe, then it is negative equity. If the offer is more than how much you owe, then it is positive. 

Trading in a Car with Negative Equity

Positive equity puts you in the most ideal position as the trade-in process will still be pretty easy. You will be able to trade in your current vehicle without owing any amount and have some ready cash available that you can use towards the downpayment for your next car! However, if you have negative equity, you will need to consider the following options and see which one will work best for your financial situation.

• Make up the difference you still owe after accounting for the trade-in price. This is the simplest option, however not everyone will have enough spare cash to do this.
• Another option is to transfer the amount you still owe over to a new loan. Most Colts Neck-area drivers choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. You should note however that transferring the amount to your new loan will likely increase the monthly payment, and you will still be paying for a car that you traded in. This situation is commonly referred to as being upside-down in your new loan. If you can’t keep up with your current car payments and you are downsizing with a less expensive vehicle, this could be the best option for you.

No matter which option you go with, Land Rover Monmouth recommends you to always carefully review the contract before signing a new car loan. 

Learn More About the Trade-in Process with Land Rover Monmouth 

Still have questions about how to trade in a car that you still owe on? Feel free to contact us online or give us a call at (877) 672-8810. Our friendly and knowledgeable team will be happy to assist you. Meanwhile, take a moment to explore our new vehicle specials and pre-owned vehicle offers to take advantage of some of the best deals in the Red Bank area.