How To Trade In A Car That’s Not Paid Off

Tiny car with coins and finance paperwork

While you may have sold your car to a dealership in the past, you may not have tried to do so with a car that still has a loan balance. Depending on how much you owe and the value of your vehicle, the process can get slightly complicated. The good news is that the East Tennessee Dodge Chrysler Jeep RAM finance team is here to help you learn how to trade in a car that’s not paid off, so you can take on your commute from Cookeville to Sparta with renewed passion.

Negative Equity vs. Positive Equity

The first step in selling a car that’s not paid off is to determine if you have positive equity or negative equity:

  • Positive equity: Currently, your car is worth more than your loan balance.
  • Negative equity: Currently, your car is worth less than your loan balance.

Calculating if you have positive equity or negative equity is a simple process. You’ll want to compare your loan amount vs. your trade-in value. You can use our trade-in value tool to get a strong idea of the value of your car. If that amount is more than what you owe, you’re in good shape to make the trade. If the trade offer is less than your loan balance, you have negative equity.

Negative equity, or being “underwater” on a loan isn’t all doom and gloom. In fact, there are a number of ways you can make the trade and purchase the car you desire when you have negative equity. Discover some of these methods below.

Ways to Trade In A Vehicle That’s Not Paid Off With Negative Equity

Explore different techniques on how to trade in a car that’s not paid off with negative equity here:

  • Pay off the difference you still owe after estimating the trade-in price. This is the best method if you’re looking to make a clean upgrade with minimal financial ramifications. In this scenario, you’ll sell your car to the dealer, and pay the remaining balance of the loan off with cash. If you can’t afford that method, don’t worry! Explore other options below.
  • Rollover your loan balance. This option is incredibly common. When you roll over your loan, the buyer of your car will pay off the balance. In return, that same amount will be added to your new loan. This is a solid plan if you hope to downsize to a more affordable vehicle with more manageable payments. 
  • Explore the market. You can shop around at different dealerships and third-party buyers to try and secure top dollar for your ride. Maximizing your profit is a great idea when you have negative equity.
  • Negotiate for a fair price. If you explore the Harriman area for a better price, you can use that data to boost your trade offer. Any trade offers from third-party buyers are great bargaining chips!

Learn More with East Tennessee Dodge Chrysler Jeep RAM

If you’re still not totally sure how to trade in a car that’s not paid off, East Tennessee Dodge Chrysler Jeep RAM is here for you! You can contact us at your convenience or visit our Crossville dealership to get personalized advice to match your needs and budget. Shop with us to make your automotive dreams come true!


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