How to Trade in a Car That’s Not Paid Off?

August 10th, 2021 by

Tiny car with coins and finance paperwork

Savvy drivers all over the Downey region are well aware of how to trade in their vehicles at dealerships for a new vehicle or cash. Despite the trade-in process at Toyota of Whittier fairly simple when the car’s payments are complete, the process can quickly become complicated if your car still hasn’t been paid off. Wondering how to trade in a car that’s not paid off? Our finance experts are more than happy to help you learn how to trade in your car that’s not paid off!

Positive or Negative Equity

To find out how you can trade in a car that’s not paid off, you will have to first determine which of the two financial situations applies to you:

  • 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 figure out which equity you have, you’ll need to find out how much you still owe on your current vehicle, how much you’re getting from trade-in offers, and how much your car is worth according to values from verified car experts like Kelley Blue Book® or Edmunds. If it is more than how much you still owe, then it is positive equity. However, if the offer is less than the amount you owe, then it is negative.

If you have positive equity, then you’re in the best possible situation as the trade-in process will still be fairly stress-free. You will be able to trade in your current Puente Hills vehicle without owing any amount and even have some money left over to use towards your next Toyota vehicle!

It’s important to keep in mind that if you have negative equity, you’ll, unfortunately, have to consider your options and see which plan of action will work best for your financial circumstances.

Options for How to Trade In A Car That’s Not Paid Off With Negative Equity

For West Covina drivers who have negative equity, how do they trade in their car that’s not paid off? There are a few choices they have available:

  • 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 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 don’t work, you should work with a third party and see how the trade-in offers compare to those you’ve gotten from your local dealerships. Third-party used car companies, such as Carvana and Carmax, 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 visited. Provide them 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.

Learn More About How to Trade in a Car That’s Not Paid Off at Toyota of Whittier!

If you still have any questions about how to trade in your car that’s not paid off, then just contact us here at Toyota of Whittier today and we can help you out! However, if you’re more interested in purchasing a new vehicle in El Monte, then we recommend waiting until you have paid your car off fully to come trade-in for our latest models.


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