How to Trade in a Car That is Not Paid Off

Are you looking to upgrade your current vehicle? What if that car still has a balance on the loan? You may be wondering how to trade in a car that is not paid off. In the guide below from the finance experts at Kearny Mesa Kia, we cover how to trade in a car you still owe on and more. Let’s get started so that you can find your dream car in no time. 

Do You Have Positive or Negative Equity? 

Before we discuss how to trade in a car that is not paid off, you first need to determine whether you have positive or negative equity on your vehicle loan. Here’s the difference between the two:

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

Find the value of your vehicle with our trade-in tool, then see how much you still owe on the loan. If the offer is less than the amount you owe, then it is negative equity. If you are to receive more for your trade than the remaining balance on your loan, you have positive equity. 

When it is time to trade in your car near Kearny Mesa, you are in the best possible position with positive equity. You can then put the remaining trade value toward your next car from us.

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

Not sure how to trade in a car you still owe on with negative equity? There are a few options to consider.

• Make up the difference you still owe after accounting for the trade-in price. This is the best possible option if you have the money currently available to do so. 
• 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. Keep in mind that transferring the old balance to your new loan will increase the monthly payment. You are also paying for a vehicle you no longer own, and you will instantly be upside-down in your new loan. However, if you are struggling to keep up with the payments on your current car and plan to downsize or opt for a more affordable model, this option can be an acceptable choice. 

Contact Kearny Mesa Kia for More Information

If you have additional questions on how to trade in a car that’s not paid off, do not hesitate to reach out to the team at Kearny Mesa Kia. We would be happy to assist you with all of your automotive financing needs. Be sure to check out our helpful tips today.