How do you trade in a car that’s not paid off? The trade-in process is pretty straightforward when your car’s completely paid off, the process for a car you still owe money on can have a few more steps. Learn more with Bayer Graham’s finance center below and understand more about how to trade in a car that’s not paid off!
How to trade in a car you still owe on varies based on your equity:
You’ll need to know how much you still owe on your current vehicle, how much the car is worth according to Kelley Blue Book® values, and how much you are getting from trade-in offers. You’ll have negative equity if the offer is less than the amount that you owe. If the amount is more than how much you still owe, then it’s positive equity.
If you have positive equity, then you’re in the most ideal position in this situation as the trade-in process will still be fairly easy. You won’t owe anything when you trade in your vehicle, and you’ll have money left over to use toward your next car!
If you have negative equity, you’ll need to take a look at your options to see which one is right for your financial situation since your car will not be worth what’s currently owed on the vehicle.
How do you trade in a car that you still owe money on? You could make up the difference yourself, but many people can’t just pay off the difference just like that.
Another option is to transfer the amount you still owe over to a new loan, but it’s not ideal. Most people choose this option when they have negative equity and they want to trade in their current vehicle that’s not paid off. Transferring the amount to your new loan can increase the monthly payment though, and you will still be paying for a car that you traded in. This will make you upside-down in your new loan, and it could put you at risk if you’re having trouble already making monthly payments or aren’t able to pay the difference on your current loan. Downsizing to a cheaper car with lower monthly payments is usually your best option if you’re transferring the amount you still owe over to a new car loan.
Our team at Bayer Graham can help you figure out your best options as you’re deciding on your next vehicle or looking to trade in a vehicle you still owe money on. Drivers can also try to refinance their current auto loan in order to get a better rate, reducing the total interest paid while lowering their monthly payments.
If you still have questions about how to trade in a car that’s not paid off, contact us today to learn more about your options. Our team is prepared to help you get the next rate available on your next auto loan, and we’ll help you sift through your options.
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