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How to Trade in a Car That is Not Paid Off?

Woman shaking mans hand over a car contract clipboard with car keys


Lots of drivers around Seattle and beyond are familiar with trading in a vehicle at a dealership like Honda of Kirkland to either take some cost off a new vehicle, or put some capital back in their pocket. The trade-in process is pretty straightforward, especially when the vehicle is paid completely off – but the process is a bit more involved if your vehicle is not yet paid off. So… how do you trade in a car that is not paid off? Check out the following guide to find the answer – and do be sure to contact us with any questions you may have!



Determine: Positive or Negative Equity?

To see whether or not you qualify to trade in a car that isn’t paid off, you’ll first want to determine which of these two situations applies to you and your vehicle:

  • 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 calculate which type of equity applies to you, you’ll need to know how much you still owe on your current vehicle, how much the car is worth according to a pricing source like Kelley Blue Book, and how much you’re getting from trade-in offers. If the offer for your trade-in is less than the amount you owe, then it is negative equity you’re dealing with – if it’s the other way around, positive.

Positive equity puts you in the most ideal position – the trade in process will likely be rather easy. You’ll be able to turn in your current Woodinville commuter without any owed amount left over, and may even end up with some extra cash to put toward your next car!

Trading in a Car with Negative Equity

For drivers who are dealing with negative vehicle equity, there are several options when it comes to trading in a vehicle. Our finance team would be happy to explore any of these options, in order to find the one that works best for you:

  • Make up the difference you still owe after accounting for the trade-in price.
  • Another option is to transfer the amount you still owe over to a new loan.
  • If those two options aren’t for you, then you should work with a third party and see how the trade-in offers compare to the ones you have gotten from your local dealerships.
  • If you still have negative equity with a higher appraisal value, then negotiate with the initial dealership you went to.

No matter which route you end up taking, the Finance experts at Honda of Kirkland always recommend that you read your contract carefully before signing your new car loan.

Trade Ins are Easy at Honda of Kirkland!

Got any more questions about trading in a car that’s not paid off? We can help! The experts in our Finance Department know all the ins and outs of trading in a vehicle, especially if it’s not yet paid off! We’re just a quick drive from Redmond, come see us!


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