Exterior view of the 2021 Acura TLX Type S in Tiger Eye Pearl

How to Trade in a Car That is Not Paid Off

The trade-in process is relatively simple when you have paid off your vehicle, but it requires a few more steps if that’s not the case. Learn how to trade in a car you still owe on with the finance team at Rallye Acura in Roslyn. Then, explore our inventory to start brainstorming about which car you’re going to upgrade your Garden City commute with!



Positive and Negative Equity

If you want to trade in a car that’s not paid off, you will have to assess your situation. Which of these two situations are you in:

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

You can calculate your vehicle’s equity by taking the amount you still owe on your vehicle, the car’s worth according to Kelley Blue Book®values, and how much you can get from trade-in offers. If the offer you get is less than the amount you owe, then, you have negative equity. The reverse is true if it is more than how much you still owe, in which case, you have positive equity.

Positive equity puts you in the most ideal position. In this case, the trade-in process will remain fairly easy. With positive equity, you will be able to trade in your current Glen Cove ride, and you won’t have a remainder that you owe. You may even be able to use some of the amount towards your next vehicle.

On the other hand, if you have negative equity, you may want to reconsider your options and see which one will work best for your financial situation.

How to Trade in a Car That’s Not Paid Off with Negative Equity

Glen Cove drivers who have negative equity can still trade in their vehicle, here are the options:

  • Make up the difference you still owe after accounting for the trade-in price. This is the best option, and the first to consider. Not everyone will have enough spare cash to do this, but it is beneficial if you do.
  • You can also transfer the amount you still owe over to a new loan. Many people choose this option if they have negative equity. Be wary of this option though because transferring the amount to your new loan can increase the monthly payment. In the end, you will still be paying for a car that you traded in, putting you upside-down in your new loan. If you can’t keep up with your current car payments, and you need to downsize to a cheaper car, this could be the best option for you.
  • If you still have negative equity with a higher appraisal value, you can negotiate with the initial dealership. Inform the dealership of the offer you got from a third-party company and see if they will match it. If they can’t match it, you can ask the dealer for a value of the difference you still owe. From there, you can sell your car outright to the third-party company while having the difference transferred to your new loan.

How to Trade in a Car You Still Owe On at Rallye Acura

If you still have questions about trade-in options, you can contact our team at Rallye Acura in Roslyn by calling 516-508-9147. We can help you figure out the best options for you. If you want a new vehicle, we are happy to help you figure out how to improve your situation. Come visit us today to discuss your options in person! If you have other questions about auto finance, be sure to explore our car buying and selling tips for other helpful reads, like our overview of the difference between leasing and financing and what to check when buying a used car!


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