How to Trade in a Car That is Not Paid Off

Let’s say you’re in need of a larger car for a growing family or maybe a smaller car with a lower monthly bill, but you haven’t yet paid off your old loan yet. What do you do? Researching how to trade in a car that’s not paid off might seem daunting at first, but you actually have several options in the Hamilton Township and Lawrenceville area. Let’s take a look at how to assess your situation wisely, and learn how to trade in a car you still owe on with Hyundai of Trenton today!

Do You Have Positive or Negative Equity? 

Before we dive into how to trade in a car that is not paid off, you’ll have to take inventory. Do you have positive or negative equity going into the trade? Here’s a brief description of each:

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

If you’re not sure, you’ll need to find out 1) what your car is worth and 2) how much you owe. First, look at sites like Kelley Blue Book® or our own value your trade tool. Then, check your previous statements to see your latest balance. Compare the two numbers. If your car’s value is greater than your balance, you have positive equity. This means your trade-in process will be straightforward. Simply bring in your car, and the cost of the trade-in will cover your remaining loan payments.

Trading in a Car with Negative Equity

Let’s say you find yourself in the opposite situation, where your car’s value is less than the outstanding balance on your loan. This is called negative equity. While this situation is a little trickier than positive equity, you still have options available:

• Make up the difference you still owe after accounting for the trade-in price. If you have the free funds to pay off your loan, this is the quickest and easiest way to get out of negative equity.
• Another option is to transfer the amount you still owe over to a new loan. Most South Brunswick Township drivers will take this option. Though you’ll pay off the old and new loans at the same time, it can be worth it, especially if you are downsizing to a cheaper car. However, you’ll start with negative equity. 

Start the Trade-in Process with Hyundai of Trenton 

Now you know how to trade in a car you still owe on in theory, but what’s the best plan of action for your unique needs? Contact us at Hyundai of Trenton at any time to find out. We’d love to talk about how to trade in a car that is not paid off without disrupting your finances, and you can always visit our finance center in Ewing Township to chat in person.