How to Trade in a Car That is Not Paid Off

Are you ready to drive a new vehicle around Irvine? Do you still owe on your current model? Is it possible to trade in a car you still owe money on? Yes! Learn how to trade in a car that is not paid off today with the finance team at Weir Canyon Honda. We detail how to trade in a car you still owe on and will help throughout the trade-in process. Contact us with questions and let us know if there’s a vehicle from our inventory you are interested in—we are here to set up a test drive at our Anaheim dealership! 

Do You Have Positive or Negative Equity? 

To see how you can trade in a car that’s not paid off, you will have to first determine which of the two situations you are: 

• 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 which equity you have, 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. If the offer is less than the amount you owe, then it is negative equity. However, if it is more than how much you still owe, then it is positive. 

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 will be able to trade in your current Yorba Linda ride without owing any amount and even have some you can use towards your next car!

However, if you have negative equity, you will need to consider your options and see which one will work best for your financial situation.

Trading in a Car with Negative Equity

For Tustin drivers who have negative equity, how do they trade in their car that’s not paid off? There are a couple of options available: 

• Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
• Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. However, transferring the amount to your new loan can increase the monthly payment, and in the end, you will still be paying for a car that you traded in. In other words, this will make you upside-down in your new loan. If you can’t keep up with your current car payments, and you are downsizing with a cheaper car, this could be the best option for you.

No matter which options you end up going with, Weir Canyon Honda recommends that you always read the contract carefully before signing the new car loan. 

Learn More About the Trade-in Process with Weir Canyon Honda 

Do you have additional questions about how to trade in a car you still owe on? Are you ready to start the trade-in process? Call (714) 777-4100 or contact us online today with questions and to make an appointment. For additional auto finance-related reads, review our guides on what is considered good interest on a car loan and how to sell a car at a dealership!