How to Trade in a Car That Is Not Paid Off

Excited Couple Reviewing Trade in Offer with Salesman


Are you looking to upgrade to something new for your Minneapolis commute but still owe money on your current vehicle? You’ve probably considered trading in your current vehicle, so you can have more money to put down towards the purchase price of your new dream ride. But, if you still owe money on your current vehicle, then you might be overwhelmed due to wondering how the process will work. The trade-in process for a vehicle you still owe money on is essentially the same process as trading in a vehicle that’s paid off with just a few more steps. Learn how to trade in a car you still owe on with the finance team at Morrie's 394 Hyundai. Then, visit our dealership to trade in your vehicle.



Positive vs. Negative Equity

The first step in going about how to trade in a car you still owe on is determining whether or not you have negative or positive equity. If you’re unfamiliar with those terms, here is what they both mean:

  • Positive Equity: Positive equity is when your vehicle is currently worth more than what you still owe on the loan amount. For example, if your vehicle is currently worth $8,000, and you only owe $7,000, then you have $1,000 of positive equity.
  • Negative Equity: Negative equity is when your vehicle is worth less than what you still owe on the loan amount. An example of negative equity would be if your vehicle is worth $6,000, and you still owe $7,000 on your loan. In this scenario, you have $1,000 of negative equity.

To know whether or not you have positive or negative equity, you’ll need to know how much your current vehicle is worth. You can find out what your vehicle is going for in the Richfield area by visiting sites like Kelley Blue Book and comparing trade-in offers. You can also value your trade online at Morrie's 394 Hyundai. If you find out that your vehicle has positive equity, then you’re in an ideal position as the trade-in process is pretty straightforward.

However, if you have negative equity, then don’t fret. Trading in a vehicle with negative equity is also pretty straightforward, but there are some steps that you should consider.

How to Trade in a Car With Negative Equity

Here is how to trade in a car that is not paid off with negative equity:

  • Make up the difference between the trade-in price and what you still owe. While this is one of the best things you can do to make the trade-in process easier, it’s understandable if you don’t have the spare cash to do so.
  • Transfer the remaining loan balance over to a new loan. This is also known as rolling over your loan. It consists of transferring the amount of your current loan onto the amount of the new loan you would take out for your new vehicle. Keep in mind that this doesn’t eliminate what you owe on your current vehicle but just adds that amount to the amount that you’ll pay for your new vehicle. If your current monthly payments are too much, and you want to downsize to a less expensive used vehicle, then this could be an option worth considering.
  • Work with a third party, and compare those trade-in offers to dealership offers. Third-party used car companies like Carvana and CarMax usually offer higher prices for used vehicles. This could be a more viable option compared to other dealerships in the Minnetonka area.
  • Negotiate the trade-in price with your dealership. Try to negotiate the final trade-in offer with your dealership by showing them other offers you found from third parties and other websites. If your dealership can match these offers, then you can also try asking the dealership for the value of the difference that you still owe. This will allow you to sell your car to a third-party company while having the difference transferred over to a new loan.

Now that you know how to trade in a car that is not paid off, you hopefully have a clearer vision of how to confidently navigate the process and how to get the best deal possible. For more car-buying tips and advice, reach out to the team here at Morrie's 394 Hyundai.

Trade Your Car in St. Louis Park

Contact us to learn more about how to trade in a financed car that you still owe on, so you can make the best decision possible. For any other questions and inquiries, don’t hesitate to ask anyone at our dealership.


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