Do You Have Positive or Negative Equity?
To see how you can trade in a car that’s not paid off, you will have to first determine which of the two situations you are:
- 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 equity you have, you’ll need to know how much you still owe on your current vehicle, how much the car is worth according to
Edmunds, and how much you are getting from trade-in offers. If the offer is less than the amount you owe, then it is negative equity. However, if it is more than how much you still owe, then it is positive.
If you have positive equity, then you’re in the most ideal position in this situation as the trade-in process will still be fairly easy. You will be able to trade in your current vehicle without owing any amount and even have some you can use towards your next car!
However, if you have negative equity, you will need to consider your options and see which one will work best for your financial situation.