How to Trade a Car That Still Has Payments Due

by Jamie Lisse

If you have a car that you are still making payments on, you can trade it in for another car if you need to. Car dealerships are used to people trading in vehicles with loans on them. In fact, car dealerships often accept trade-in vehicles where the owner owes more on the car that it is actually worth. While it is easier to trade in a car that is worth more than you owe, you can have success trading in a car that is worth less than you owe on the car loan as well.


Check the trade-in value for your car by using the Kelley Blue Book website (see Resources). Be sure to enter in your zip code and make selections for any special features that your car has in it.


Contact your car loan lender to get the 30-day pay-off amount. Once you get the pay-off amount, use a calculator to subtract the trade-in value from the pay-off amount to see what your negative equity is on the vehicle. This is the amount that you are upside-down on the auto loan. It is also possible that you owe less than the trade-in value, which means you would not have any negative equity and a trade-in would be easy.


Visit a local auto dealership to trade-in the car. Since you have an idea of how much negative equity you have on the car, you can either see if the dealer will roll over the negative amount into the new car loan or if you can put down a payment amount to cover the negative equity. It is possible that there may be some cash incentives at the dealership that can be used to cover all or part of the negative equity. If the car happens to be worth more than you owe, you just give the dealer your pay-off amount and the extra equity is considered to be a down-payment on the new vehicle.

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About the Author

Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.

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