If you're looking to trade in my car that's not paid off, Sierra Blanca Motors can help. Contact us at 575-315-9861 today!
When buying a new vehicle, many car owners decide to trade in their old vehicle to help offset the total cost. However, you might be asking yourself, "how do I trade in my car that's not paid off?" With the help of the professional team at Sierra Blanca Motors, the process is very straightforward. We're proud to be a family-owned dealership serving Ruidoso, NM, and neighboring cities like Roswell, Alamogordo, and Las Cruces.
The first step is to discover your car's value. If you owe more than your car's value, you'll have to pay the difference. In other words, you'll determine if your vehicle has positive or negative equity.
Trading in a Car With Positive Equity
When your car's value is more than what you owe on your loan, known as positive equity, the process is much simpler.
It's highly recommended to trade in your vehicle when it has positive equity. Our car dealer in Ruidoso, NM, will apply that equity towards your new vehicle purchase. Doing this will lessen how much you need to finance. You can even apply the difference as a down payment to finance your new car.
For these reasons, holding off until your car has positive equity is recommended, but read on if you still plan to trade in your vehicle with negative equity.
Trading in a Car With Negative Equity
Negative equity means your vehicle's value is less than what you owe. In many cases, it's advisable to wait before you trade in your car or purchase another one. For example, it's not uncommon for relatively new cars to depreciate in the first few years.
However, not everyone can wait until their loan payments have bridged the gap. If you wish to trade in your car with negative equity, you generally have two options:
- Rolling your equity into your new loan: This first option isn't recommended. While you'll have to pay less from the start, your total loan amount will increase. Additionally, you'll probably have to pay more interest.
- Paying the difference: If you have the money, paying the difference between your loan and what you're being offered for your trade-in is your best bet. While you will pay more upfront than rolling your equity into your new loan, the loan will be more manageable.
Trading in a car with negative equity isn't ideal. Waiting and making loan payments before searching, "trade in my car" is often the better solution. However, some car owners decide to pursue this option when they can't afford their car payments.
Not being able to afford car payments may result in the following:
- Interest charges accumulating on your debt
- Having a mark on your credit report
- Having your car repossessed
In these scenarios, it's sometimes cheaper to trade a car with negative equity.
Value Your Trade-In Vehicle
Before driving off to trade in your vehicle, it's crucial to determine your car's total value. You can start by researching your car's fair market value. Kelley Blue Book and Edmunds can produce an estimate based upon elements like:
- The make and model of your vehicle
- The number of miles it has
- The year of your vehicle
Your car's overall condition will also determine its trade-in value. A dealership will evaluate its interior and exterior conditions. Most cars fall under the following categories:
- Excellent
- Good
- Fair
- Poor
The majority of pre-owned vehicles end up categorized as Fair condition. Typically, only new cars hardly driven will be deemed excellent.
Get the Most of Your Trade-In at Sierra Blanca Motors
Trading in your car that's not paid off requires some extra considerations. You first need to determine if you have positive or negative equity. Next, you need to estimate your trade-in value utilizing factors like your car's condition and market interest.
Lastly, to get the most out of your trade, you'll want to visit us at Sierra Blanca Motors. We're a family-owned dealer serving Ruidoso, NM, and the surrounding areas and have served the community for over 50 years. We pair our great selection of pre-owned and new vehicles with excellent customer service.
Instead of searching, "trade in my car," visit us at Sierra Blanca Motors. Contact us at 575-315-9861 today!
