How to Trade in a Car That Is Not Paid Off

If you’re interested in saving on your next ride, you might be considering trading in your current vehicle and putting the money towards the next one. This is a perfectly viable option that plenty of Kansas City drivers take advantage of, but what if you still owe money on your current car? Can you trade in a car with payments? The short answer is yes, but there are some important caveats to be aware of. The finance team at Lee’s Summit 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 thing you should do if you’re interested in trading in a vehicle that isn’t fully paid off is to determine if you’re in positive or negative equity. Here’s what that means:

• If you owe more on your vehicle than its current value, you are in negative equity. 
• If you owe less on your vehicle than its current value, you are in positive equity. 

There are a few ways to determine whether you’re in positive or negative equity. First, you can use a third-party source like Kelley Blue Book to calculate the current value of your vehicle to see how much money you’re likely to get for it. You can also use our handy online tool to value your trade, and we can give you an estimate ourselves!

Trading in your vehicle is much easier if you’re in positive equity, since you can trade in your vehicle and get some extra money to put towards your next Blue Springs ride. It won’t be as much as you would get if the vehicle was fully paid off, but it’s still an easy way to save on your next car! However, if you’re in negative equity, it isn’t necessarily the end of the road – you still have a few options. We’ll discuss those options in more detail below.

Trading in a Car With Negative Equity

If you find yourself in negative equity – that is, if you owe more on your vehicle than its current value – here are a few options you can take:

• Make up the difference after accounting for the trade-in price. The easiest thing you can do is simply pay the difference out of pocket, so you won’t have any excess money to pay off once you have your new car. Be sure to carefully review your current financial situation before making any commitments.
• Transfer the amount you still owe to a new loan. If you aren’t able to pay the difference out of pocket, consider transferring the amount you owe on your current vehicle to the next vehicle’s loan. While this means you’ll essentially start your new loan period already upside-down, it can be an ideal option if you’re downsizing to a cheaper car, since your monthly payments won’t dramatically increase.
• Work with a third party to see if you can get more money for your car. If you aren’t satisfied with the trade-in value you’ve gotten, consider going to a third-party company like Carvana or Carmax, which tend to appraise cars at higher prices. If they determine that your car is worth more than you thought, you may not be in negative equity anymore!
• Negotiate with the initial dealership. The first price you got from the dealership may not necessarily be set in stone–consider negotiating with the dealership to get a better deal. If you’ve gotten a better value estimate from one of the third-party companies listed above, use this as a bargaining chip to try and increase the offer from the dealership.

Trade in Your Vehicle With Lee’s Summit Dodge Chrysler Jeep Ram

If you have any questions about how to trade in a car that is not paid off, feel free to contact our office! You can also stop by our dealership near Independence to talk to a member of our finance team in person, and we’ll be happy to help you with whatever you need.