How to Trade in a Car That’s Not Paid Off

Are you a Radcliff driver looking to trade in your vehicle at our dealership for a new or used model on our lot? While the trade-in process is simple when your car is totally paid off, you might wonder how to trade in a car that is not paid off. It’s a little more complicated if this is your situation. Sternberg Chevrolet is here to give you the facts on how to trade in a car you still owe money on. Our finance professionals will guide you through the process of upgrading at our Louisville dealership, located near Elizabethtown. Looking to learn more about the world of automotive finance? Check out our car-buying tips!

Do You Have Positive or Negative Equity?

To see how you can trade in a car that is not paid off, you’ll first have to determine which of these two situations you’re in:

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

To calculate your equity, you’ll need to know how much you still owe on your present vehicle, how much the vehicle is valued at according to Kelley Blue Book®, and how much you’ll be getting from your trade-in offer. If the offer is less than the amount you owe, you have negative equity. However, if it’s more than how much you owe, it’s positive equity.

Trading in a Car with Negative Equity

If you have negative equity, we’ll tell you how to trade in a car that you still owe money on. It’s a little more difficult, but you still have options. They are as follows:

• Make up the difference you still owe after accounting for the trade-in price. This will be your first option. Paying cash to make up the difference between your amount owed and your trade will allow you to enter your new loan without being underwater.
• Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they want to trade in their New Albany, IN with negative equity. Keep in mind that going this way will increase your monthly payment and leave you paying off a car that you traded in. It also means you’ll be upside-down on your new loan from the moment you sign it. But if you can’t keep up with your current car payments and you’re looking to downsize, this could be a good choice.

And as with any contract, we encourage you to read it closely and look at the fine print. Our finance team would be more than happy to help you.

Learn More About Trading In With Sternberg Chevrolet

We’ve shown you how to trade in a car that’s not paid off. However, if you have further questions beyond how to trade in a car that you still owe money on, our specialists are ready to answer them. Contact us today to get in touch with an expert who can help you or apply for financing to get pre-approved for your next auto loan.