How to Trade in a Car That is Not Paid Off?

If you’re looking to save some money on your next Kailua Kona ride, you might be considering trading in your current vehicle. This is a great way to get some extra cash, either to put towards your next car or to save for yourself. The trade-in process is relatively straightforward, and Big Island Motors is here to help you every step of the way.

But what if your current vehicle isn’t currently paid off? Can you trade in a vehicle that you still owe money on? The short answer is yes! Our finance team has more information on how to trade in a car you still owe on in the guide below.

Do You Have Positive or Negative Equity?

The first step is trading in a vehicle that isn’t fully paid off is to determine whether you’re in positive or negative equity. Here’s what those terms mean:

• If you owe more than your vehicle’s current worth, you’re in negative equity
• If you owe less than your vehicle’s current worth, you’re in positive equity

You can estimate the value of your current vehicle using our online tool from Kelley Blue Book. You can also shop around for estimates from different buyers to get an idea of your vehicle’s worth. Trading in a car with positive equity is relatively easy–you won’t get as much as you would if the vehicle was fully paid off, but you’ll still be able to hand over your vehicle without owing anything on it and get some money to put towards your next car.

Trading in a Car with Negative Equity

If you’re in negative equity, you’re in a bit more of a complicated position. However, it’s still possible to trade in your vehicle for a new one. Here are your options:

• Make up the difference out of pocket. This is the easiest option, since you’ll pay off the remaining amount in one piece and won’t have any debt going into your next vehicle. However, you should carefully review your financial situation before taking this option, since people don’t have the cash to spare.
• Transfer the amount you still owe to a new loan. If you find yourself in negative equity, you can add the amount you owe on your current vehicle to the new loan. This will increase your monthly payments and start you off with a load of debt, but it will mean that you can move on to a new vehicle right away. This is a good option for Hilo drivers who are downsizing to a new, more affordable vehicle.
• Work with a third party to appraise your vehicle. If you aren’t satisfied with your vehicle’s value estimation, you can work with a third-party used car company like Carvana or Carmax to try and get a better deal.
• Negotiate with the initial dealership. Another option is to try and get a better deal from the initial dealership, especially if you got a better offer from a third-party dealership.

Learn More About the Trade-in Process with Big Island Motors

If you have any questions about how to trade in a car that’s not fully paid off, feel free to contact our office! You can also stop by our dealership near Honokaa to talk to a member of our team in person about your financial situation, and we’ll be happy to help you out.