Can I Trade in a Car That Is Not Paid Off?

How to trade in a car that is not paid off — is this even possible? This is a topic that comes up often at Superior Mazda. Car buyers want to trade in their vehicle, but they’re still making payments on it. We explain whether or not this is possible and how to proceed.

Trading a Car That Isn’t Fully Paid

The short answer is yes, you can trade in a vehicle that you’re still making payments on. However, there are additional caveats involved. The dealership will take over your loan and pay it off. The amount is deducted from the car’s value.

Before trading in a car you still owe money on, it’s important to determine whether your vehicle has positive or negative equity.

Trading a Car with Positive Equity

Positive equity means the car’s value is worth more than you still owe. For example, if your car is worth $10,000 and you still owe $6,000, the dealership will be able to pay off the remaining $6,000 balance on your behalf. There’s a positive net difference of $4,000, which can be applied towards your new vehicle purchase.

Trading a Car with Negative Equity

Negative equity means the car’s value is less than what you owe. For instance, if the car is worth $10,000 but you still owe $12,000, that’s a negative balance of $2,000. You will have to pay that additional $2,000 out of pocket.

Do Your Homework

The car’s value can be determined using a site like Kelley Blue Book or Edmunds. Use their free estimator tool to determine your car model’s worth.

Learn How to Trade in a Car That Is Not Paid Off in Bentonville, AR

The dealers at Mazda dealers in Bentonville, AR at Superior Mazda can assist you in the trade-in process regardless of what you may still owe. We’ll walk you through the process, so you acquire a new vehicle and trade in your existing car — all in a single visit. Come see us soon!