How to Trade in a Car That is Not Paid Off

Sometimes you need to change things up, so if you’re looking for a new vehicle to upgrade your daily Chicago drives, then you’ve come to the right place. But how do you trade in a car that is not paid off? We have all the information you need to know in our handy guide from Sutton Ford below.

Find out from our finance center team how to trade in a car you still owe on. When you’re ready to make the switch, browse our new vehicle inventory and then apply for financing with our online form to start the car-buying process at our Matteson dealership.

Do You Have Positive or Negative Equity? 

To see how you can trade in a car that’s not paid off, you will have to first determine which of the two situations you are: 

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

To calculate which equity you have, you’ll need to know how much you still owe on your current vehicle, how much the car is worth according to Kelley Blue Book® values, and how much you are getting from trade-in offers. If the offer is less than the amount you owe, then it is negative equity. However, if it is more than how much you still owe, then it is positive. 

If you have positive equity, then you’re in the most ideal position in this situation as the trade-in process will still be fairly easy. You will be able to trade in your current New Lenox ride without owing any amount and even have some you can use towards your next car!

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

For Hammond area drivers who have negative equity, how do they trade in their car that’s not paid off? There are a couple of options available: 

• Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
• 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. However, transferring the amount to your new loan can increase the monthly payment, and in the end, you will still be paying for a car that you traded in. In other words, this will make you upside-down in your new loan. If you can’t keep up with your current car payments, and you are downsizing with a cheaper car, this could be the best option for you.

No matter which options you end up going with, Sutton Ford recommends you to always read the contract carefully before signing the new car loan. 

Learn More About the Trade-in Process with Sutton Ford 

We know some aspects of the car-buying experience may be confusing, so feel free to reach out to our team at Sutton Ford with any questions you may have on how to trade in a car that is not paid off. Otherwise, feel free to review our car-buying tips and calculate your payments online to get started. We look forward to seeing you in your new ride around New Lenox.