How to Trade in a Car That is Not Paid Off

Trading in vehicles is a process that Indianapolis dealerships do every day. Noblesville drivers are typically familiar with trading in for a new vehicle or for cash, but, can you trade in a financed car? Yes! There are additional steps when trading in a car with negative equity. So, how do you trade in a car that is not paid off? Read our guide below on how to trade in a car you still owe on from our finance team at Penske Chevrolet.

Trading in a Car with Negative Equity or Positive Equity 

Before diving into how to trade in a car that is not paid off, you’ll need to assess whether you have positive or negative equity: 

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

Can you trade in a financed car if you have negative equity? Yes, our finance experts recommend using Kelley Blue Book® values to find out your vehicle’s current value in the Carmel auto market. If your trade-in offer is less than what you currently owe, you have negative equity. If it is more than your current car loan, then it is positive.

Trading in a Car with Negative Equity

The process of how to trade in a car you still owe on with negative equity is dependent on the option you choose: 

• Make up the difference you still owe after accounting for the trade-in price. Many drivers opt for this choice because it typically puts them in a better situation. You’ll need to have enough spare cash to make up the difference. 
• Another option is to transfer the amount you still owe over to a new loan. Remember that this will increase your monthly payments and overall loan amount. You’ll instantly be upside-down on your new loan. This is a great option for those who are looking to get a cheaper car if the current car loan is too expensive.

To help Westfield customers save, we offer the following financial programs: Chevrolet College, Chevrolet Military, Chevrolet First Responders, and Chevrolet Educators. 

Explore the Trade-in Process with Penske Chevrolet 

Still unsure of how to trade in a car that is not paid off? Contact us to speak with one of our finance experts today!