When most Davenport drivers trade in a car, they either upgrade or take the cash. But if you still owe on your loan, things get more complicated. If you need to learn how to trade in a car that is not paid off in full, the team at McGrath Chevrolet of Dubuque is here to explain your options. Get an overview of how to trade in a car that you still owe on, and then visit our finance center in Dubuque to start working on a plan.
HOW TO TRADE IN A CAR THAT IS NOT PAID OFF?
Positive equity
Your car is worth more than what you still owe.
Negative equity
Your car is worth less than what you still owe.
If you're not sure which of the two applies to you, you'll need to do a
little bit of research. First, check how much you still owe on your vehicle
from your old statements. Second, utilize sites like Kelley Blue Book® or our
Value Your Trade tool to estimate your car's current value.Â
Those
with positive equity in East Dubuque, IL or Platteville, WI will find the
trade-in process to be straightforward. Because your car is worth more than you
owe, you can trade in your vehicle without owing any extra money. You can even
use the remaining money toward your new vehicle!
Trading in a Car with Negative Equity
If you have negative equity, the trade in process requires a few more steps. Because your car is worth less than you owe, you'll need to cover the difference. There are two primary ways to accomplish this:
 Make up the
difference you still owe after accounting for the trade-in price. This is
the easiest option by far, so if you have the means, we recommend going
this route. It will instantly take you out of negative equity.
Another option is to transfer the amount you still owe over to a new loan. The more common option is to simply roll over your loan. This means you transfer your old loan to your new loan, which means you pay for both at the same time. This will put you upside down on your loan immediately, but if you downsize to a less expensive car, it can benefit you in the long run.