How to Trade in a Car That is Not Paid Off

Trading in your vehicle at a local dealership is killing two birds with one stone as you can let go of your old car while having extra money for the upgraded one! But what about if you haven’t paid off your current vehicle yet? Can you still trade it in? Definitely though depending on if you have positive or negative equity, the process might take more steps. See how to trade in a car that is not paid off below from the finance experts at Honolulu GMC! If you want to just sell your car instead, learn how to sell it in Hawaii instead.

How to Trade in a Car You Still Owe: Positive vs. Negative Equity

The very first thing you should do is to figure out if you have positive or negative equity in Waianae. Gather these amounts: how much you still owe on your current car, how much the car is worth according to Kelley Blue Book® values, and how much you are getting from trade-in offers. Then, you can compare your outstanding balance and your car’s market value or trade-in offer to determine which equity you have: 

• You have positive equity if your car is worth more than what you still owe.
• You have negative equity if your car is worth less than what you still owe.

If you have positive equity, you’re in the best spot possible since all you have to do is trade in your car like usual. You might even earn some money back in the process! However, if you have negative equity, you will need to look into your options and see which one will work best for your financial situation.

How to Trade in a Car You Still Owe On When You Have Negative Equity

How to trade in a car that is not paid off can be daunting for drivers with negative equity since the process can get complicated. However, it still might be beneficial for you in Waipahu depending on your situation. Consider these options below: 

Option 1: Make up the difference you still owe after accounting for the trade-in price. 

You should always consider this option when learning how to trade in a car that is not paid off. As you can see, positive equity puts you in a better position than negative equity, so if you are able to wait until after you pay off the outstanding amount, you should! 

Option 2: Transfer the amount you still owe over to a new loan.

If you can’t wait until then or decide it’s better to trade in your car now than later, you will essentially get into your next vehicle while also moving the amount you owe to that new loan. While this will make you upside-down in your new loan, you might find this option favorable if you are struggling to keep up with current car payments and are downsizing to a cheaper model. Make sure to read the contract carefully before signing the new agreement! 

Option 3: Shop around with third-party companies to compare offers from your local dealerships.

The beauty of trading in a car is that you get to shop around and find the best offer. If you believe your local dealerships aren’t offering you as much as your car is worth, you can always find out how much third-party used car companies will offer you. These companies,such as Carvana and Carmax, tend to appraise cars at higher prices, which might be able to help you not have negative equity anymore! If you still have negative equity with a higher appraisal value, you can go back to the initial dealership to negotiate a better offer. 

Sell Your Car to Honolulu GMC Today! 

Now that you know how to trade in a car that you still owe on, let’s get this process started! At Honolulu GMC, we are more than happy to buy your car even if you don’t want to buy one from us and our finance team will take care of all the paperwork to make this a smooth-sailing experience for you. If you are trading in your car to us for another model, be sure to browse our inventory and apply for financing online! Contact us with any questions about the trade-in process in Honolulu.