How to Trade in a Car That is Not Paid Off

Some Alpharetta drivers aren’t clear on how to trade in a car that is not paid off. Fortunately, United BMW is here to help! You can trade in your vehicle to dealerships for either another vehicle or cash. The trade-in process is a bit more complex when your car’s not paid off, but still pretty straightforward. If you want to know how to trade in a car that’s not paid off, keep reading. Our financing team has collected our best tips on how to trade in a car you still owe on. If you have questions, contact us!

The Impact of Positive vs. Negative Equity

The first thing to do when trading in your car around Roswell is to determine which one of these two situations applies to you:

• Positive equity: If your car is worth more than you owe, you have positive equity
• Negative equity: If your car is worth less than you owe, you have negative equity. Sometimes we refer to this as “being upside down” on your loan. 

To calculate if you have positive or negative equity, you’ll need to know how much you still owe on your current vehicle and how much your vehicle is worth according to Kelley Blue Book® or other resources—like our own trade-in valuation tool. Then you need to soliciting trade-in offers from dealerships in the Marietta area. If the offer on your car is less than the amount you owe, then you have negative equity. But, if it is more than you still owe, you have positive equity. 

Positive equity is the best scenario because the trade-in process will be easier—and BMW resale values are typically very strong. With positive equity, you will be able to trade in your current ride and have some money to use towards buying your next car! If you have negative equity, you have several options to consider to determine which one is best for your financial situation.

Trading in a Car with Negative Equity

If you have negative equity, you’re probably still wondering how to trade in a car that’s not paid off. These are your choices:

• Make up the difference you still owe after receiving trade-in funds: This is the best option because it can quickly improve your situation. If you can pay off the remainder of your loan with a lump sum payment, it’s easier to move forward.
• Transfer the amount you still owe to a new loan. Most Johns Creek drivers choose this option—commonly described as “rolling over” the loan—if they want to trade in a car with negative equity. However, transferring the remaining amount from your old loan to your new loan will increase your monthly payment and total loan balance. In other words, you will once again be upside-down on your new loan. If you can’t keep up with your current auto loan payments and you want to downsize to a cheaper car, this is likely the best option for you.
• Shop around to see if you can get a better offer, then try to negotiate with the initial dealership. Show them the offers you got from the other companies and ask them if they are willing to match it. 
• Wait until you pay your car off to trade it in. Sometimes patience is the best solution.

Whatever option you choose, United BMW recommends that you always thoroughly read your contract before signing any new car loan paperwork. 

Learn More About the Trade-in Process with United BMW 

If you still have questions about how to trade in a car that you still owe on, reach out to the United BMW finance specialists for help. To get an idea of what you might be able to afford, browse our inventory of new BMW models and pre-owned vehicles from the comfort of your home.