How to Trade in a Car That Is Not Paid Off

Signing Finance Documents for Car
 
Interested in upgrading to a new vehicle in Marlton, but still have a loan balance on your current car? Don’t worry – you’re not stuck! It is possible to complete a trade-in on a car that is not paid off. You simply need to be aware of all potential financial scenarios. Learn more about how to trade in a car you still owe on with Honda of Turnersville. When you’re ready, visit us in Turnersville to sell us your vehicle!

Determine Your Equity Status

When it comes to how to trade in a car that is not paid off, you will first need to determine your vehicle’s equity status. To do so, you will need to find out what your loan balance is and how much your vehicle is worth using our Value Your Trade tool. You will then find yourself in one of two equity situations:

  • Positive equity, which means your car is valued higher than your loan balance
  • Negative equity, which means your car is valued lower than your loan balance

How to Trade In With Positive Equity

Having positive equity on your financed vehicle is the most ideal situation you can find yourself in if you wish to trade it in. That’s because you can apply the amount you receive for the sale toward your loan, and then use the rest toward a down payment on your next vehicle. You aren’t left with any prior financial obligations and can move forward in the process without a hitch. You’ll hit the Vineland roads in a new Honda CR-V or new Honda Odyssey in no time!

How to Trade In a Car With Negative Equity

The most complicated part of how to trade in a car that is not paid off arises if you find yourself with negative equity. Here are your options:

    • Make Up the Difference: Pay out of pocket for the remainder of your loan balance after you apply the trade-in value. Not everyone has the spare cash for such an endeavor, but it leaves you with a more favorable financial situation for your next car.
  • Complete a Loan Transfer: Another way to go about trading in a car with negative equity is to transfer the remaining balance of your initial car loan to a new loan you take out to fund your next vehicle. Consult the Honda of Turnersville finance team for additional information.
  • Compare Trade-In Offers: You can always turn to third-party used car companies, such as Carvana and Carmax, which tend to appraise cars at higher prices. This may lift you out of negative equity.

Trade In Your Financed Car at Honda of Turnersville

Still have questions on how to trade in a car you still owe on? Don’t hesitate to reach out to Honda of Turnersville! We are proud to serve as your source of automotive advice in the Berlin area.

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