How to Trade in a Car That is Not Paid Off

Let’s say you’re ready for a new vehicle in Los Angeles, but you’re not quite done with the old one. North Hollywood Toyota is here to teach you how to trade in a car that you still owe on. While the trade-in process is normally fairly straightforward, there may be a few extra steps if your car isn’t paid off. However, the team at North Hollywood Toyota has plenty of options to discuss to get a new plan in action! Find out how to trade in a car that is not paid off, and get more car buying tips at North Hollywood Toyota.

Do You Have Positive or Negative Equity? 

First thing’s first, do you know whether you have positive or negative equity? This will determine the next steps in your trade-in process. You’ll need to find out how much you still owe on your car, as well as how much your car is currently worth in the Glendale and Burbank area. You can look up sites like Kelley Blue Book® or use our own Value Your Trade tool to help. Then, compare the two numbers:

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

Positive equity is the most ideal position. You can simply trade in your old car for a new car, and you can even put the extra money toward your new purchase. If you have negative equity instead, you’ll just need to do a little bit of extra research.

Trading in a Car with Negative Equity

Negative equity isn’t a dealbreaker, so there’s no need to worry. However, you’ll need to do an extra step or two before you can sign your paperwork. Here are your two main options:

• Make up the difference you still owe after accounting for the trade-in price. If you have enough extra funds to do this, it’s the easiest way to get your finances back in line. Just pay off the old loan and move onto your next car.
• Another option is to transfer the amount you still owe over to a new loan. The majority of drivers will choose this option instead. The dealership will add the old loan to your new loan, and you’ll pay off both simultaneously. This puts you upside down on your new loan immediately, but if you downsize to a less expensive car, it can still help you out in the long run.

Start the Trade-in Process with North Hollywood Toyota 

Still have questions on how to trade in a car you still owe on? No problem, as the team at North Hollywood Toyota can discuss your financing options in person in North Hollywood. Feel free to contact us in the meantime or stop by our dealership to sit down with our experts today.