How to Trade-In a Car That’s Not Paid Off

August 10th, 2021 by

Tiny car with coins and finance paperwork

If you are financing your current vehicle, but are considering an improvement, you might be wondering if you can trade-in a financed car. Even if you still have payments on this vehicle, there are ways you can get behind the wheel of a better model more suited to your needs, but this doesn’t mean your previous loan payments will also be gone. Learn more about how to trade-in a car that’s not paid off from the sales experts at San Francisco Honda!

Can You Trade In a Financed Car?

As mentioned above, the main aspect to remember when looking to trade-in a financed car is that you’ll still be responsible for the payments on your old vehicle. When you trade-in at San Francisco Honda, our team takes into account mileage, mechanical condition, car features, condition of the exterior and interior, and market availability and demand, for a comprehensive value of the car. Here are the complete steps on how to trade-in a car that’s not paid off:

  1. Determine the remaining balance on your loan. It is typically listed on your monthly statement.
  2. Use our Value Your Trade tool (or another service from a resource like Kelley Blue Book) to get an estimate on the value of your current vehicle. Note that this is simply an estimate, and it’s only once the vehicle has been physically inspected that the dealership will establish what the car is worth.
  3. If the remaining amount of your auto loan is less than the trade in offer from the dealership, then you’ll have money leftover that will go towards purchasing a new car from the dealer.
    1. For example, if you still owe $7,000 on your car in Daly City, and the dealer offers you $8,000 to buy the car, the loan can be paid off and you’ll have $1000 to contribute towards your next car.
  4. If the remaining balance of your auto loan is more than the trade-in offer, then you’ll still owe money on your car—this is called negative equity. You can pay off the remainder in full before buying your next car, or you may have the option to roll over the balance into your next auto loan with the dealer.

What Does “Rolling Over” A Loan Mean?

If you’re considering trading in a financed car, you might hear the term: “rolling over a loan.” This option may be offered at certain dealerships who promise to pay off your old loan no matter how much you owe. While this sounds like a great option, this is too good to be true, as the price gets added to your new loan on the next car you buy. This basically means you’ll be paying off two loans at the same time: one for your current vehicle, and another for your old financed car.

Trade-In Your Current Vehicle at San Francisco Honda

Now that you know how to trade-in a car that’s not paid off, you can take the next step to secure your next ride along Oakland roads. Trade-in your car at San Francisco Honda and discover incredible savings on your next purchase when you browse our national offers and incentives. Our sales team is here if you have any questions on leasing vs. buying, so be sure to contact us to schedule your test drive at our dealership in San Francisco!


More from San Francisco Honda

  • National Teen Driver Safety Week

    Did you know that this week is National Teen Driver Safety Week?   October 17-23, 2021.   We are using this week as a reminder to talk to our teenage children about the importance of staying safe behind the wheel. While these are important conversations to have every week, this week we are being sure…

  • Honda Civic Si EvoTrack Racing Video Game

    Get A High Score With The New 2022 Honda Civic Si EvoTrack Experience   Check out Honda’s newest mobile and desktop video game! Go to from your mobile phone or on your desktop computer to get behind the wheel of a New Honda and earn a high score. Easily challenge your friends and family…

  • Who Makes The Most Fuel-Efficient Vehicles?

    Ding! Yes, Honda makes the most fuel-efficient vehicles!   Honda is the most fuel-efficient full-line auto-maker in America, according to the 2020 EPA Automotive Trends Report. Based on 2019 model year data, the latest available, new Honda vehicles averaged a “real world” 28.9 mpg, a full 4 mpg better than the industry average.   It…

Posted in Uncategorized