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

If you’re like many Sussex drivers, you’ve been thinking about trading in your vehicle to a dealership for a new one or cash. The trade-in process is quite simple when you’ve completely paid off the vehicle, but there are a few more things you need to know if you still owe some money on the loan. So, let’s find out how to trade in a car that is not paid off with Mercedes-Benz of Newton today! For more information, feel free to contact us anytime!

Do You Have Positive or Negative Equity? 

When learning how to trade in a car that is not paid off, you must first figure out if you have positive or negative equity:

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

It’s easy to calculate the type of equity you have, you just need to take a look at your bill to figure out how much you have left on your current vehicle and see how much your vehicle is worth using the Kelley Blue Book® value. If the offer the dealership provides is less than the amount you still owe, it’s considered negative equity. If it’s more than you owe, you’re in positive equity. 

Positive equity is the ideal situation, as it will be easy to trade in your current vehicle. You won’t owe anything when you trade in your current Hackettstown vehicle and can put the money you have leftover towards your new vehicle. 

Having negative equity is less ideal, as you will still owe money on your current vehicle and need to decide what’s best for your financial situation.

Trading in a Car with Negative Equity

If you’re a Newton driver who has negative equity, let’s learn how to trade in a car that is not paid off with negative equity below:

• Pay the difference you owe after accounting for the trade-in price. You should consider this option first, as it could work if you have some spare cash lying around. 
• Transfer the amount you still owe over to a new loan. This is one of the most common options for people with negative equity interested in knowing how to trade in a vehicle that is not paid off. It’s important to note that this could increase the amount of the loan, therefore, increasing your monthly payment as well. This option will make you upside-down on your loan and would be a good option if you plan to purchase a less expensive vehicle. 
• You could also use a third party and see how the trade-in offers compare to the ones you have gotten from your local dealerships. Third-party dealers such as Carmax and Carvana usually offer higher prices for trade-ins and will help you get out of negative equity.
• You could negotiate with the initial dealership you went to if a third party offers a higher price. Give the initial Newton dealership you went to the offer provided by the third-party, and see if they’re willing to match it. If they can’t match it, you could use the value of the difference owed, sell the vehicle to the third party, and transfer the difference to the new loan.

Regardless of which option you ultimately choose, the experts at Mercedes-Benz of Newton recommend carefully reading any new contract before agreeing to the new loan.

Trade-in Your Vehicle with Mercedes-Benz of Newton Today!

Now that you know more about how to trade in a car you still owe on, come stop by Mercedes-Benz of Newton for an appraisal! While you’re here, browse our new vehicle inventory, and meet with our finance center to start the buying process! Be sure to use our new vehicle specials to save near Hamburg!