We encourage our customers to utilize our online trade-in appraisal tool to get an accurate estimate of their current car's value before trading it in. When they do, a frequent question is whether a vehicle can be traded in if money is still owed on it. The answer is yes, it can - and it's easier than you might think. Hall | MileOne Autogroup details the process here.
Two Important Terms to Know: Positive Equity and Negative Equity
Positive equity: This is when your car's appraisal value is higher than what you still owe on it. When you trade in a car with positive equity, our Norfolk, VA car dealership pays off the balance of your existing loan and then puts the remainder toward the purchase price of your next vehicle.
Negative equity: This is when the balance of your existing loan exceeds the car's appraisal value - in other words, you're trading in a car that you still owe money on. Negative equity is also known as being "upside down" on a loan.
Negative equity is not uncommon, and there are two straightforward ways to resolve it. You can either pay the negative equity amount before you purchase your next new or pre-owned car, or you can add the negative equity amount to the price of your next vehicle. The latter solution will increase the monthly payment on your next car, but it's a popular choice because it avoids you having to make two lump-sum payments simultaneously: one to cover the negative equity of your old car, and the other for a down payment on the new auto.
Next Steps
Before you start shopping for your next car, contact your lender to get the exact payoff amount of your current car. Once you have this, the next step is for our dealers to appraise the car and establish its trade-in value. This allows us to confirm whether you have positive or negative equity.
Get Trade-In Appraisals and Answers Near Chesapeake, VA
Hall MileOne Autogroup makes everything about cars and car ownership easier. This includes trading in your old car, whether or not you still owe money on it. Visit your nearest Hall dealership today so we can further discuss the trade-in process and the personalized used car financing that will make your next purchase a breeze.