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

August 3rd, 2021 by

 Tiny car with coins and finance paperwork

Are you thinking of trading in your car, but wondering if it needs to be paid off first? At Mcconnell Chevrolet, Santa Rosa and Larkfield-Wikiup drivers can trade in their car whenever they’re ready, even if it has a remaining loan balance. The key thing to know is that trading in a financed car doesn’t eliminate the remaining payments. If you’re wondering how to trade in a car that’s not paid off, we’ve got everything you need to know in the guide below!

How Does Trading In a Financed Car Work?

  1. Check your monthly statement to see exactly how much you still owe on your car.
  2. Use a car trade-in calculator to estimate the current value of your car. Keep in mind that this is only an estimate, and the actual value of your car might be higher or lower depending on how the inspection and appraisal at the dealership goes.
  3. If your loan balance is lower than the value of your car, you’re in excellent shape to trade it in! You’ll even have a bit of money leftover that can be applied to your next purchase.
    1. For example, if you still owe $5,000 on your car in Petaluma, and the dealer offers you $6,000 to buy the car, the loan can be paid off and you’ll have $1000 to contribute towards your next car.
  4. What if the loan balance is higher than the current value of your car? This is known as negative equity. You can either wait until you’ve paid off the loan to trade in your car, or have the remaining balance rolled over into a new loan with the dealership.

What Does it Mean to “Roll Over” a Loan?

Some dealerships will imply that by rolling over your loan balance, they’re paying it off for you. Of course, this is too good to be true! Reputable and transparent dealerships like Mcconnell Chevrolet will let you know that rolling over your loan simply means that the negative equity is combined with a new loan on a new car. Essentially, you’ll be paying off the old loan while also paying for the new loan. If you’re eager to get into a new vehicle as soon as possible or you’re rolling the old loan into a new loan for a car that’s more affordable than the old car, this could be a viable option.

Learn More About Your Options at Mcconnell Chevrolet

Whether you’re looking for a new Chevrolet or a certified pre-owned option, Mcconnell Chevrolet makes it easy to trade in your car with a remaining balance. With any questions, please contact us or stop by our dealership in Healdsburg. Our team is standing by to help!

 

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