It’s possible to trade in a vehicle for either a new one or for cash. With a vehicle that is completely paid off, the trade in process is straightforward. There are a few more steps you will need to take if your loan isn’t paid off, however. Learn more from the team at Santa Cruz Subaru about how to trade in a financed car, and why this could put you in a good position. If you have any questions, feel free to contact our finance team or stop by for a visit in Capitola, just outside of Santa Cruz.
The first step in learning how to trade in a car that is not paid off is determining what type of equity you have. Positive equity means your car is worth more than what you still owe (for example, if your vehicle is worth $16,000, but you only owe $6,000, this is an ideal situation to be in. Negative equity means your car is worth less than what you still owe; this can happen for a number of reasons we’ll discuss below.
To determine your type of equity, first find out how much you still owe on your current vehicle, then determine how much the car is worth according toKelley Blue Book® values or similar tools like our own trade-in calculator. If the offer is less than the amount you owe, then it is negative equity. If it is more than how much you still owe, then it is positive.
Positive equity puts you in an ideal situation for trading in your vehicle, and you won’t owe any money. In this case you will likely have some extra funding to put towards your next vehicle! If you have negative equity, you will want to read on to learn about your options.
If you are a Monterey driver that needs to know how to trade in a car with a loan and negative equity, there are a few paths you can take. Check out the specifics of how to trade in a financed car, below:
This would put you in the best financial situation, however not everyone will have enough spare cash to do this. It will work in your favor if you do because you can have a clean slate when you get the loan for your next car.
This is a frequent choice for Watsovnille drivers with negative equity that want to trade in their current vehicle that’s not paid off. Keep in mind, transferring the amount to your new loan will increase the monthly payment and in the end, you will still be paying for a car that you traded in. This will probably 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 you still have questions about how to trade in a car that is not paid off, be sure to reach out to the finance experts at Santa Cruz Subaru today and we can help you! If you are looking for a new vehicle in Capitola, then it could be best to hold off until your vehicle is totally paid off.
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