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Most car shoppers expect to keep their vehicle at least until it’s paid off. Sometimes, though, situations arise where we need to get rid of cars and consider trading them in for another.

Is it possible to trade in a car if it’s not paid off? A better question might be: is it worth trading in a vehicle you still owe money on? Read on to learn all about trading in a car that isn’t paid off.

Can You Trade In A Car That’s Not Paid Off?

how to trade in a car that is not paid off

Did you buy a car but it’s been giving you trouble? Maybe your needs and circumstances have changed and you’re now in the market for another vehicle.

However, you still haven’t paid off your current car but you plan to trade it in. Is this possible?

In many cases, yes, it’s completely possible to trade in a car that you haven’t paid off. Below, we go over how and where you can do this as well as some pros and cons of trading in a car that you haven’t paid off.


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Trading In A Car That Is Not Paid Off

Wondering how to trade in a car that is not paid off? Review the steps below:

1. Find out how much you owe

While you might be making monthly payments toward your car, you might not know exactly how much you have left to pay. So, you’ll need to first determine the exact amount you have left to pay.

2. Find out how much your car is worth

can you trade in a car if you still owe money

Once you know what you owe, it’s time to figure out if trading in your car is worth it. You’ll find this out by getting an estimate of its value. This step will guide you on your next decision.

Websites like Kelley Blue Book and Edmunds are great free resources for determining the value of your car. Knowing your car’s worth will also give you negotiating leverage if a dealership lowballs you.

If your car’s value is greater than the amount you still owe to your lien holder, you have positive equity. This means that you’ll be able to pay off your car during your trade-in and use the remaining toward the new model.

On the other hand, if the value of your car is less than the amount you owe, you will have negative equity. In this case, you’ll need to make up the difference and pay not only toward your new car but toward the remainder of your loan as well.

3. Gather your paperwork

When you decide that you want to move forward with a trade-in, you’ll need to prepare your paperwork for the dealership. These are the documents you will most likely need:

  • Driver’s license

  • Auto insurance information

  • Auto loan information

  • Vehicle title

  • Car keys

  • Proof of income

  • Proof residency

Title Loans For Cars Not Paid Off

get a title loan for a car not paid off

Loans called title loans are also a factor that should be considered when you’re trying to trade in your car.

You’ll know if you have a title loan because these are loans that you have to apply for. With this kind of loan, your car is used as collateral until you pay off that loan. So, you cannot trade in your car until the loan is paid off and your title is released.

The good thing with these kinds of loans is that your car must first be paid off. This means that you’re free to sell or trade in your vehicle once the loan is paid.

Pros And Cons Of Trading In A Financed Car

Is it worth trading in a car that you haven’t fully paid off? Take a look at the pros and cons of doing so below:


  • The trade-in process is easy. You can sell your old car and get a new one on the same day.

  • The dealership takes care of all the paperwork for you.

  • You can get a good deal on your next car.


  • Car dealerships tend to lowball no matter how new or well-kept your car is.

  • If you have a large balance on your car loan, you’ll be taking a big financial hit.

  • Your credit can be negatively affected as your lien holder can report the loan as “charged off.”

Who Buys Cars That Are Not Paid Off Near Me?

who buys cars not paid off

Although trading in a car is a fast and easy way to get rid of your old model and drive off in a new one, there are downsides. In some cases, such as when you have negative equity, it is smarter to sell your car, then shop for the car of your dreams.

CarBrain is the perfect solution if a trade-in leaves you paying more for your next car that is within your budget. We buy all kinds of cars nationwide and will buy yours even if you still have a lien on it.

Here’s how:

  1. Get an offer! We provide a fair-market rate for your car in 90 seconds when you request an estimate online.

  2. Schedule the pickup! You accept our offer and schedule a free pick-up with the help of our customer representatives.

  3. Get paid! A local tow truck comes in 24 to 48 hours to pick up your car and hand you your check.

You’ll need to hand over the keys and a signed title to get paid, but if your car is not paid off, your lien holder likely holds the title. If this is the case, our specialists can work with your lien holder to get the title released.

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