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

Trading in a vehicle with an outstanding loan balance is not unheard of, but the steps on how to trade in a car that’s not paid off is probably unfamiliar to most San Francisco car owners. That’s probably because there’s an extra yet important layer to the process— determining if you have positive or negative equity. So let’s first find out which equity you have and then we can explore your options accordingly! Follow along with the finance center at Victory Toyota of San Bruno.

Positive or Negative Equity

You will need the following before you can determine if you have positive or negative equity:

• Remaining balance on your auto loan
• Estimated trade-in value according to Kelley Blue Book® values
• Amount of the offers you are getting from dealerships in the San Bruno area

If your vehicle is worth more than the amount you owe on the loan, then you have positive equity. When you have positive equity, the process on how to trade in a car that’s not paid off will be similar to trading in one that’s paid off. However, if your car is worth less, then you have negative equity and you will need to take extra steps depending on what you opt for next.

Ways To Trade In A Car With Negative Equity

Still owe money after the trade-in offer? Then, you can choose from the following paths to take in Oakland:

• Clear the payoff amount if you have the money for it. This is the best scenario when you have negative equity since you can start fresh!
• Pass on your remaining loan amount to your new loan. You will be upside down in your new loan and might have to pay higher monthly payments, so be careful. However, drivers who play this option right by downsizing to a cheap car, will be able to manage their finances better.
• Shop around for better offers by going to third party used car companies, such as Carvana and Carmax, in Burlingame. They tend to make higher appraisal offers than dealerships, so you might be able to cover all of the rest of your loan amount.
• Got a higher offer from a third party, but you still have a remaining balance on the loan? Ask the initial dealer you went to to match the offer. If they don’t match it, have them write a check of the difference between their offer and the third party’s offer, so you can then sell your vehicle to the third party. Take advantage of the highest offer while having your outstanding loan moved to your new loan.

Pick Our Brains About More Trade-In Questions

Whether you have positive or negative equity, Victory Toyota of San Bruno just want to give a friendly reminder to those who are getting a new car loan to read over the new contract carefully, so they know exactly what the interest rate and loan terms they are getting into.

Have more questions for us? Contact us! Selling your car that’s not paid off is still easy when you come to Victory Toyota of San Bruno.