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How To Trade In a Car That Is Not Paid Off?

Excited Couple Reviewing Trade in Offer with Salesman

Trading in your vehicle is one of the best auto financing routes you can take when upgrading vehicles. Using your current vehicle’s value on the market, you can finance a newer vehicle you’re thinking of buying. This can drastically reduce the amount you have to pay for the new vehicle. But although this is a popular route our Torrance customers take, many ask how to trade in a car that is not paid off?

This can be an issue for some drivers, but with the help of the financial specialist at Airport Marina Honda, we can help you! If you’re interested in learning how to trade in a car you still owe money on, use this guide put together by the specialist at our Los Angeles dealership. Contact us today or apply for financing with our finance center to see what deals you can get today!

Positive and Negative Vehicle Equity

Before you start the vehicle trade-in process, you need to know if you have Positive or Negative equity. Both of these financial positions can make knowing how to trade in a car that is not paid off easier or harder for you. Many of our Culver City customers aren’t sure where they stand when it comes to this or what it even means. Learn more about positive and negative equity below:

  • 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 know where you stand if you’re learning how to trade in a car you still owe money on, you need to know how much you still owe on the vehicle, how much it’s worth on the market, and how much they’re offering for a trade-in at the dealership. If the offer is less than you owe, it’s negative equity; if it’s more, it’s positive.

If you stand in positive equity, you’re in the ideal position to trade in a car at our dealership near Santa Monica. If you’re negative, it’s best you look at other auto financing options. See what’s available to you below.

Trading In a Car with Negative Equity

If you have negative equity with your current vehicle, you don’t have to worry. There are still many options available to you at Airport Marina Honda. Check out some options you have available to you:

  • 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 received from your local dealerships. Third-party used car companies 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 with 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 the 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.

Discover Your Auto Trade Options at Airport Marina Honda

If you are unsure of how to trade in a car that is not paid off, visit us at our dealership in Los Angeles to consult with our financial team to see your options. Get the most out of your auto financing today! Contact us for more information!


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