How to Trade in a Car That’s Not Paid Off
How to Trade in a Car That’s Not Paid Off
Are you hoping to trade in your current car near Columbus and Cleveland? Did you pay off the car yet? If you haven’t, should you go through with the trade-in? Find Your Ride informs Dublin, Grove City, and Powell, Ohio, car owners if a trade-in is possible.
Can You Trade in Your Car?
Trading in your car will be possible even if you have not paid it off yet. Before you go racing to a car dealership, you’ll need to find out how much your car is worth and how much equity you have in the car.
How to Find Out What Type of Equity You Have
Equity is the amount left that you owe on the car minus the value of the car. If you owe less than the car is worth, you have positive equity. If you owe more than the car is worth, you have negative equity.
To find out how much your car is worth, review Kelley Blue Book® or Edmunds price guides online. These guides can show you how much your car is worth according to make, model, and year.
Once you’ve found a ballpark estimate for your car, you’ll want to check your remaining loan amount. See which figure looms larger, and you’ll know if you possess positive or negative equity.
Positive or Negative Equity: Should You Trade it In?
When you find out that you have positive equity, all signs point to yes to trading in your car. Since your car is worth more than the loan, you’ll be able to put the difference toward your new purchase or lease. This is the ideal situation aside from paying off your car.
If you owe more on your loan than your car is worth, you have negative equity. You will be taking a loss if you attempt to trade in your car. It’s also known as being “underwater” or “upside down” in a loan.
If you do decide to trade the car in, you’ll be responsible for the difference. You must either pay it outright or you may need to add it to your new loan amount. Unfortunately, this does not eliminate the underwater or upside-down status because you’re just creating a larger loan.
Other Options for Negative Equity
Hearing that you have negative equity may not be pleasant. You may want to explore other options. For example, you may consider waiting longer to trade in the car. Do you really need a new car right now? Could you delay the trade-in until you pay off more of the loan?
If you really see no other choice, you could roll the difference into a new car loan. Shop around and try to find a more affordable car with lower interest rates. You may need to downsize and find a smaller or less prestigious model, but this offers some relief if you cannot keep up with the car payments as they are.
Trade in or Sell Your Ride at Find Your Ride
While you can trade in a car that isn’t paid off near Columbus and Cleveland, it’s a good idea to assess your equity level. You’ll see if it’s time for a trade-in or if you should postpone it for another day.
Let us know how we can help you trade in or sell your ride at Find Your Ride, conveniently located near Dublin, Grove City, and Powell, OH. Contact us online today!