How to Trade in a Car That is Not Paid Off?

If you’re looking to upgrade to a new vehicle near Cadillac, you may be wondering how to trade in a car you still owe on. Fortunately, it’s an easy process here at Serra Nissan of Traverse City and takes just a couple more steps than trading in a vehicle that has already been paid off. Learn how to trade in a car you still owe on with the finance experts at Serra Nissan of Traverse City below!

Positive vs. Negative Equity

Before we dive into how to trade in a car that is not paid off, the first step is to determine whether you have positive or negative equity. 

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

Determining whether you have positive or negative equity is a fairly straightforward process. Here is what you will need to know:

• The amount of money you still owe on your current vehicle
• How much the vehicle is worth according to Kelley Blue Book or the Serra Nissan of Traverse City value your trade tool

Next, get some trade-in offers from Cadillac dealerships. If the offers are lower than the amount you owe, you have negative equity. If the offers are more than how much you owe, you have positive equity. Positive equity is ideal and will make for a much simpler trade-in process. You will be able to trade in your current vehicle without owing a leftover balance, leaving you with more money to use toward the down payment of your new ride! 

How to Trade in a Car with Negative Equity

If you have negative equity and are wondering how to trade in a car you still owe on, you have a few different options. The option that is best for you will depend on your current financial situation. 

• If you have a flexible budget, the best solution is to pay cash and make up for the difference you still owe after getting your trade-in value. This will help keep the amount of your new loan lower.
• If you don’t have extra cash to put toward the difference, you can roll over your current loan balance into a new loan.Keep in mind that this will increase your new loan amount and make you upside-down in your new loan. In other words, you will still be paying for the car you traded in. If you’re having trouble with your current car payment and are trying to downsize to a cheaper vehicle, this may be your best option.
• Third parties like Carvana or Carmax tend to appraise vehicles at higher prices, so you go through them to see if their trade-in offers exceed the offers you have gotten from used car dealerships near Bellaire.
• If you still have negative equity after getting a higher appraisal, you can still negotiate. Go back to the dealership, present them with the offer you received from the third party company, and ask them to match it. If the dealer is unable to match it, you can try asking them for a value of the difference you still owe, so you can sell your car outright to the third-party company while having the difference transferred to your new loan. 

Note: Always take the time to carefully read the contract before signing a new car loan agreement.

Questions About How to Trade in a Car That is Not Paid Off?

While we typically recommend waiting until you have paid off your car in full before you start considering a new vehicle near Manistee, everyone’s situation is different. That said, we will be happy to help you trade in a car that is not paid off yet. Our experts at the finance center are just a phone call away, so please don’t hesitate to contact us if you have any questions. In the meantime, be sure to check out more car buying tips from Serra Nissan of Traverse City!