Can You Trade in a Car That’s Not Paid Off?

Whether you’re looking to save on your next Ashland ride or just interested in making some extra cash, a lot of drivers trade in their current vehicle with Whitten Brothers Chrysler Dodge Jeep Ram of Richmond. The trade-in process is pretty straightforward in general, but can you trade in a car that’s not paid off? A lot of drivers come to us asking if they can trade in a vehicle that they still owe money on, so our finance team has put together a guide with everything you need to know about how to trade in a car that’s not paid off.

Trading in a Car You Still Owe On: Positive & Negative Equity 

The first issue you have to address when trading in a car you still owe on is whether you’re in positive or negative equity. What do these terms mean? Here’s a quick overview:

• When you owe less than the current value of your vehicle, you’re in positive equity 
• When you owe more than the current value of your vehicle, you’re in negative equity 

In order to determine whether you’re in positive or negative equity, you need to know how much your current vehicle is worth. Fortunately, there are a lot of third-party tools from companies like Kelley Blue Book that can give you quick estimates based on your vehicle’s make, model, and year. You’ll also need to know how much you still owe on your vehicle.

If you’re in positive equity, then your vehicle is worth more than you owe on it. This is the most straightforward position to be in–you can trade in your vehicle and still get some extra money to put toward your next ride. If you’re in negative equity, we’ve got some solutions below.

Trading in a Car with Negative Equity

If you’ve calculated your car’s value and found that you’re in negative equity, don’t worry–you still have options when it comes to trading in. Here are the two most common paths you can take:

• Make up the difference out of pocket. If you pay the remaining amount you owe on your vehicle in full, you’ll start your next lease with no debt. While this is the most straightforward option, you should carefully consider your financial situation before committing to it.

• Transfer the amount you owe to a new loan. If you’re unable to pay off the remaining car payment out of pocket, you may be able to transfer it to the loan on your next vehicle. This means that you can get a new vehicle right away, but it also increases your monthly payments and means that you’re starting off your loan owing money on your previous vehicle. 

Trade In Your Current Vehicle with Whitten Brothers Chrysler Dodge Jeep Ram of Richmond!

If you have any questions about how to trade in a car that’s not paid off, feel free to contact our office! You can also stop by our dealership near Chester to talk to a member of our finance team in person if you’re still wondering, “Can you trade in a car that’s not paid off?” Check out our car buying tips for more information on finding your next ride!