How to Trade-In a Car That Is Not Paid Off

If you’re looking to trade-in a car that is not yet paid off, there are a few things you need to know. Trading in a car that still has a loan balance can be a bit challenging, but it’s not impossible. In this blog post, we will discuss the steps you need to take to trade-in a car that is not paid off.

Step 1: Determine the Car’s Trade-In Value

The first thing you need to do when trading in a car is to determine its trade-in value. You can use online tools such as Kelley Blue Book or Edmunds to get an estimate of your car’s trade-in value. This will give you a good idea of what to expect when you take your car to the dealership.

Step 2: Determine the Payoff Amount

The next step is to determine the payoff amount on your car loan. This is the amount you still owe on the loan. You can get this information by contacting your lender or checking your account online. Make sure you have this information before you go to the dealership to trade in your car.

Step 3: Compare the Trade-In Value to the Payoff Amount

Once you have determined the trade-in value and payoff amount, you need to compare the two. If the trade-in value is higher than the payoff amount, you’re in good shape. You can use the difference as a down payment on your new car. However, if the payoff amount is higher than the trade-in value, you have negative equity, which can make it more difficult to trade in your car.

Step 4: Decide on a Plan of Action

If you have negative equity, you have a few options. You can pay off the difference in cash, roll the negative equity into your new car loan, or sell the car privately to pay off the loan. Each option has its pros and cons, so make sure you carefully consider which one is best for you.

Step 5: Prepare Your Car for Trade-In

Before you take your car to the dealership, it’s important to prepare it for trade-in. This means cleaning it inside and out, fixing any minor issues, and gathering all the necessary paperwork. This will make your car more attractive to the dealership and could help you get a better trade-in value.

Step 6: Negotiate the Trade-In Value

When you take your car to the dealership, the next step is to negotiate the trade-in value. This can be a bit tricky when you have negative equity, so make sure you come prepared with all the necessary information. Be prepared to negotiate, and don’t be afraid to walk away if you’re not happy with the offer.

Step 7: Finalize the Trade-In

Once you have negotiated the trade-in value, the final step is to finalize the trade-in. This means signing the necessary paperwork and transferring ownership of the car to the dealership. Make sure you read everything carefully before you sign and ask any questions you may have.


Trading in a car that is not paid off can be a bit challenging, but it’s not impossible. By following these steps, you can trade in your car and get a good value for it. Remember to do your research, compare the trade-in value to the payoff amount, and be prepared to negotiate. With a little bit of patience and perseverance, you can trade in your car and drive away in a new one.