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


Many Dublin drivers have probably heard of trading in vehicles at dealerships for either a vehicle new to them or for cash. While the trade-in process is pretty straightforward when the car’s completely paid off, the process may have more steps if your car’s not paid off. So how do you trade in a car that’s not paid off? Find out from the finance team at Celebration Kia below and learn how you can trade in your car that’s not paid off. 

Do You Have Positive or Negative Equity? 

To see how you can trade in a car that’s not paid off, you will have to first determine which of the two situations you are: 

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

To calculate which equity you have, you’ll need to know how much you still owe on your current vehicle, how much the car is worth according to Kelley Blue Book® values, and how much you are getting from trade-in offers. If the offer is less than the amount you owe, then it is negative equity. However, if it is more than how much you still owe, then it is positive. 

If you have positive equity, then you’re in the most ideal position in this situation as the trade-in process will still be fairly easy. You will be able to trade in your current Lewis Center ride without owing any amount and even have some you can use towards your next car!

However, if you have negative equity, you will need to consider your options and see which one will work best for your financial situation.

Trading in a Car with Negative Equity

For Columbus drivers who have negative equity, how do they trade in their car that’s not paid off? There are several options they can do:

  • Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
  • Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. However, transferring the amount to your new loan can increase the monthly payment and in the end, you will still be paying for a car that you traded in. In other words, this will make you upside-down in your new loan. If you can’t keep up with your current car payments and you are downsizing with a cheaper car, this could be the best option for you.
  • If those two options aren’t for you, then you should work with a third party and see how the trade-in offers compare to the ones you have gotten from your local dealerships. Third-party used car companies, such as Carvana and Carmax, tend to appraise cars at higher prices, which might be able to help you not have negative equity anymore!
  • If you still have negative equity with a higher appraisal value, then negotiate with the initial dealership you went to. Provide them the offer you got from a third-party company and ask them to match it. If they cannot match it, you can try to ask the dealer for a value of the difference you still owe, so you can sell your car outright to the third-party company while having the difference transferred to your new loan. 

No matter which options you end up going with, Celebration Kia recommends you to always read the contract carefully before signing the new car loan. 

Learn More About the Trade-in Process with Celebration Kia 

Still have questions about trading in your car that’s not paid off? Reach out to the finance experts at Celebration Kia today and we can help you! If you just want a new-to-you vehicle in the Lewis Center area, you will probably be better off waiting until you have paid your car off fully.

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