How to Trade in a Car That is Not Paid Off

When you trade in a car at a dealership, you can either pocket the money from the trade-in or put it toward the purchase of a new car or pre-owned vehicle. Can you trade in a financed car? Yes, but the process is a bit different. Find out how to trade in a car you still owe on from the finance team at Scottsdale Maserati, then stop by our dealership in Phoenix to trade in or sell your vehicle today!

Trading in a Car: Do You Have Positive or Negative Equity? 

Before we describe the steps on how to trade in a car that is not paid off, let’s take a look at the difference between positive and negative equity. Positive equity is when your car is worth more than what you still owe, while negative equity means that your car is worth less than what you still owe. To determine which equity you have, you’ll need to find out: 

• How much you still owe on your current vehicle
• How much the car is worth
• How much you’ve been offered to trade it in

If the offer is less than the amount you owe, then it’s negative equity. If it’s more than what you owe, then it’s positive equity. 

Obviously, having positive equity is a better position to be in, as the trade-in process at Scottsdale-area dealerships will be pretty simple. You’ll still be able to trade in your current car and pay off your current loan without worrying about owing anything going forward. You may also have money left over to put toward the purchase of a new or used car. But if you have negative equity, you’ll want to weigh your options and decide which solution makes the most sense for your finances. 

How to Trade in a Car You Still Owe On

If you have negative equity on your car yet still wish to trade it in or sell it to a dealership, consider one of the following courses of action: 

• Make up the difference you still owe after taking the trade-in price into account. This is the simplest option, however not everyone has the spare cash to do this. But if you do, it’ll make your situation easier. 
• Another solution is to create a new car loan and roll over the amount you still owe to this new loan. Rolling over the amount you still owe to your new loan can raise the monthly payment — and you’ll essentially still be paying for a car that you traded in. This will make you upside-down on your new loan, but if you can’t keep up with your current car payments and you are downsizing with a cheaper car, this might be a good option for you.

Learn More About Your Trade-in Options with Scottsdale Maserati 

Do you still have questions about how to trade in a car that is not paid off? The experts at Scottsdale Maserati have helped drivers from throughout the Paradise Valley and Chandler area get the fair market value of their trade in, and we’re happy to do the same for you. Contact us online or call us at (480) 605-1494 to get started today. Meanwhile, check out our car buying tips for more information.