How to Evaluate Your Vehicle Trade-In Options

Vehicle Trade-In

[Editor’s Note: This article has been updated with new information since its original posting date.]

Before you visit ANY dealership, it’s always a good idea to know where you stand in your trade-in vehicle. There’s no more awkward moment for the consumer or the dealer than when the moment of truth comes…when you find out what your vehicle is worth versus the amount of money you owe on it.

Payoff vs Value

A common misconception is that the payoff on your vehicle has some relevance to the vehicle’s value. This is simply not true. These two numbers have absolutely nothing to do with each other, so do not be confused.

Today, many people with a balance owed on their car are “upside down”. You’ve probably heard that term before. Being “upside down” means simply that the balance owed on your car is greater than its value. Many dealers also refer to this as “negative equity”. You will see the terms upside down and negative equity throughout this report. A payoff is the amount of money you owe on your vehicle.

Before you go shopping for a vehicle, you should have a good idea where you stand in your trade-in, to avoid the shock of finding out AND to make sure the dealer is treating you fairly. Below, I will walk you through exactly how to get a good idea on whether you are upside down, or if you have equity.

Finding Out Where You Stand

We need two numbers to evaluate where you stand. The first number is the exact payoff. Whether you purchased the vehicle on a retail contract, a lease, or a balloon note, there is always a payoff that can be obtained by talking to your lender. All payoffs can be gotten immediately during normal business hours by phone, and many times they can be gotten online. I will give some common payoff numbers at the end of this. Simply call your lender and tell them you need the payoff on your vehicle. Have your account number ready to give them, although some can do it by social security number.

The lender will give you either a ten-day payoff OR your current payoff today, and tell you how much to add per day until the vehicle is paid off. Keep this number, we’ll need it later.

STEP TWO is to get a true value on your trade-in.  Unfortunately, none of the big web-based sites are accurate.  They can be off by a lot AND the values could be either high or low, there does not seem to be a pattern.  Sites like Kelley Blue Book make their money sells ads online and selling your information to car dealers.

As I say on the air, a car is only worth what someone is willing to write a check for, and KBB doesn’t write checks.  There are many places who will give you a free cash offer, and typically they are good for seven days.  Our Certified Dealers will give you a bid, and there are a number of large used car operations that will do it also.  Do a Google search for “we buy cars” and your city to see what pops up.  CarMax is in many cities and they have a good process for free offers.

Determining Factors

There are a lot of factors that determine whether you can trade or not. Let’s look at a few scenarios:

  • You are less than $3000 upside down. You are in pretty good shape to trade and should not have any problems. Most lenders understand and will let you roll that amount into a new loan. Plus, on most vehicles today, there is enough in rebates to cover that amount, so you end up breaking even.
  • You are $3000 to $6000 upside down. It becomes a little more difficult to trade and to get a lender to allow you to roll that much negative equity from one loan to another, you will need to have a better than average credit rating. You might also want to choose a car with a larger rebate.
  • You are over $6000 upside down. These deals are even more difficult and you may need some cash down payment to go with your car. You will also need to have good credit. Understand too that rolling this much negative equity can have a huge effect the next time you go to trade.

Other Things to Consider

Rolling money from one vehicle to the next can have a snowball effect. In other words, every time you do this, your situation gets worse.

If you roll a lot of money from one car to the next, make SURE you are buying a car you like. Odds are, you’ll have to keep it longer, so be sure it is desirable to you …you’ll be looking at it for a while.

Rolling negative equity from one vehicle to another will have an adverse effect on your new payment. For instance, if you roll $5000 from one loan to the next, on 60 months at 5.9% you will add $100 per month to the normal payment.

You can cover up more negative equity in a lease than a purchase. But understand if you do that, it will more than likely take a longer time to trade the next time, but at the end of the lease, you’ll be completely even if you stay within your mileage.

Gap Insurance

If you roll any negative equity from one loan to the next, be SURE to purchase GAP insurance. This will cover any deficit not covered by insurance should the car get stolen or totaled.

Work toward getting even. If you roll negative equity, in essence, you end up paying for your old car AND the new car at the same time. When you can, send in extra money with your monthly payment to lower the pay off faster and get into equity quicker.

If you are upside down and are in a position to put money down on your loan, DO IT. You’ll get equity in your trade quicker, enjoy a lower payment, AND save interest charges.

Avoid the Negative Equity Cycle

I met a customer some years ago that kept rolling negative equity from one car to the next, to the next and so on. She rapidly traded about four times in three years. To make matters worse, she drove a lot of miles. When she got to me, she owed $72,000 on a vehicle worth $40,000. To this day, this one takes the prize for the most upside down person I have ever seen. As in most of these cases, she met the day of reckoning. She put $20,000 down and leased a new Explorer for two years at $1200 per month. Although this is an extreme case, after the two years were up, she was level with the world and able to start over. We put her in a lease plan to get a new car every two years and she is about to come upon her third new vehicle since that time. She has not been upside down since.

Bottom Line

If you are upside down, you are in good company. Understand that NO DEALER can make your negative equity go away. They can play numbers games to cover it up, but rest assured you are still paying for it. Knowing how much negative equity you have is a valuable tool when going to buy a new vehicle. And lastly, you cannot roll negative equity from car to car to car without it catching up to you. At some point, it gets overwhelming and you get stuck, so plan ahead.

Related Reading:

Getting Your Car Ready To Trade In At The Dealership

Photo Credit: Cherezoff/Shutterstock

  1. Leo Valentine 7 years ago

    I am doing some leg work for by daughter. She has 2002 Dodge with 98000 miles in good shape. She wants a new Dodge Durango or see. Her car is clear, and is able to pay cash for the new car. Does this give her any help in nesgosiation?sp Woild it be better to take the 0 int

    • Jerry 7 years ago

      Hey Leo, thanks for writing. The new Durango is awesome, I really like it and gave it a SUPER review. Her timing is good, you always want to get rid of a car before 100,000 miles. It will bring more money as a trade.

      Talk to my friend John the General Sales manager at John L. Sullivan Dodge Chrysler Jeep. He’ll take great care of her and give her the Car Pro Show listener pricing. Cash or finance, it won’t change the price.

      I wish you the best!

      John L Sullivan Dodge
      529 5th Street
      Marysville, CA 95901-5649

      John Wood: General Sales Manager

      Cell Phone: 530.933.4076

      Jerry Reynolds “The Car Pro”
      President, Car Pro Radio Networks

  2. avinash 7 years ago

    When you purchase your leased vehicle, isn’t the dealer supposed to get the smog test done? Or the customer has to pay? What else is done by the dealer before he sells your leased car to you? Please advise.

  3. Carol Marshall 7 years ago

    I have inherited a 1985 Mazda GLC 3-door hatchback. 92,000 miles and leaks some oil. I need to put a value to the vehicle, but Kelly Blue book and Edmunds only go back to 1991. Nada allowed me to put in a date, but came up with a low of $1,600 and a high of around $2,800. That can’t be right can it? A 27 year old car that would sell for that much? I called the local Mazda dealership but they would not assign a value. Do you have any reliable resources that I can use to determine the value?

  4. todd alexander 7 years ago

    I am looking for a Honda Accord. I found one at a nearby dealer with about 70,000 miles on it. It looks good inside and out. I felt a little vibration in the front when I applied the brakes. The dealer said all used cars get inspected and repaired before going out for sale. The dealer also says Hondas are good for 300,000 miles. I’ve heard that this year model has repeated problems with the brakes and transmission. Can you give some advice to me about this car?

    • todd alexander 7 years ago

      That is a 2009 Honda Accord.

  5. susan 7 years ago

    I have a red Ford Heavy Duty Diesel F250 two door loaded 2009 with just over 17000 that I would like to trade for a long bed used Diesel Ford or Dodge hopefully for even exchange is that an option?? in the Phoenix area

  6. Bob Mastin 7 years ago

    Jerry: I have a 1996 Dodge Grand Caravan LE. It has 280,000 miles. The AC has a leak and is not working now, I just recharge it each summer and it works fine. It leaks oil around the rockerarm cover, and transmission fluid. I keep an eye on the fluid levels and refill it every other month, or so when needed. The heater only works on the drivers side, but the mechanics can’t figure out why.

    I have checked all this on and they say the condition is GOOD with a value of around
    $ 3,300.00, without being a trade-in. That seems very high to me, I would think closer to
    $ 1,100.00, or less. I want to sell this myself, but how do I determine a true value, not too high, not too low?

  7. Ron Poggemoeller 7 years ago

    I have a 2006 Hyndai Tiburon with all the works on it and it has 141,000 because I drive it to and from work in Houston at 150 miles/day. I have had it serviced every 5,000 miles with synthetic oil, had the brakes changed at 135,000 miles and the timing belt changed (book says to do it at 60K) at 90,000 miles along with one CV Joint and a tune up. It gets between 25 and 27 mpg. No other problems or repair. The car is paid for and I love it dearly but I’m 72 years old and really don’t want to buy a new car if I don’t have to at this age. There are no more Tiburon’s, i don’t like the Veloster and really can’t afford the Gennises Coupe. Recommendations please.

  8. maelyn hinton 7 years ago

    I have a 2004 E320 Mercedes 57000 miles and it is free and clear. I am looking for a small or

    medium size suv. I want a car with a good warranty. and good gas mileage and some cargo space.
    Do I lease or buy? I’m thinking of looking for a good used Lexus. I live in Corpus Christi with no Lexus Dealer.

  9. Sheryl 6 years ago

    I have a few questions. I have a 2001 Buick Park Avenue, engine v6,3.8L. It has the service engine light on and has been leaking fluids. (not oil) I was told it has a leak in the intake manifold and possible valve cover gasket leak. I was also told that if I did not repair it, there was a possibility it would leak into the engine and ruin the engine, is this true?

    I am planning on selling the car myself and buying something else and was wondering if it is worth to fix though I won’t be able to purchase another car for about a month?

    I drive about 20-25,000 miles per year (realtor) and need a comfortable larger car but want good gas mileage as well (must have dual seat adjustments), do you have a suggestion what type of car might be suitable. I have really like my Buick but they no longer make it and it now gets bad gas mileage. (use to be great) Do they make a crossover vehicle that is a hybrid (not a plug in type)? If not, can you suggest any hybrids? I am concerned about giving up so much trunk space as I need it for signs,etc. I don’t want to buy brand new maybe a few years old, have about $25,000 to spend.

    • Jerry 6 years ago

      Sheryl – Good to hear from you! None of the hybrid SUVS perform properly in my opinion. I would strongly consider the Buick Lacrosse as a great alternative car. It has a nice back seat for your clients, and it gets good fuel economy.

      You might also consider Hyundai Genesis, it’s a great car too.

      If you need help with a dealer, go to the website and click CERTIFIED DEALERS. You’ll be in great hands!

      Jerry Reynolds “The Car Pro”
      President, Car Pro Radio Networks

  10. The CarProUSA radio show – “Straight Talk, Honest Answers about Everything Automotive” | 6 years ago

    […] Evaluating Your Ability To Trade […]

  11. Jeff H. 5 years ago

    I realize this post is a couple years old now, but wanted to chime in and say I appreciated it. I’m upside down on my current car, in a situation where I bought more than I should have AND my life situation has changed (now needing two cars rather than just the one). This blog post was really helpful in re-assuring me that I have a good idea what to expect when I go to dealers this weekend. So thanks for this!

  12. Rosa 4 years ago

    Hi, I have a 2012 Jeep Liberty with under 10m on it, I bought it brand new, I find it very big for me, I feel like I’m driving a truck, I live in snow country so I need a SUV, I owe $12,000 on it but the trade in is as high as $16,000, I’m interested in trading it in for a Subaru Crosstrek, which is about $26,000,
    Would these be like an even deal, I don’t want my payments to go too much higher, Currently I pay $270.00..

    • Jerry 4 years ago

      Rosa, good to hear from you, thanks for listening to the show! If your numbers are correct, you’ll be financing $22,000 or so plus the tax, title and license. That is going to result in quite a bit higher payment. You might consider a lease to get the payments down, doesn’t look like you are driving many miles.

      Email me from this website, if I have a Subaru dealer near you, I’ll set you up to look at specific numbers.

      Jerry Reynolds, President
      Car Pro Radio Network

  13. Alan 4 years ago

    I have a 2010 Sebring with a trade in value of $7000.00. I still owe $10,736.00 on the loan.
    I am looking to trade the vehicle in for a 2014 Dodge Avenger for $23,275 including GAP insurance. How much should the sales price be if the dealer pays off the remaining balance of the trade-in? I forgot to mention there is a $3500.00 manufacturers rebate to be applied as well.

    • Jerry 4 years ago


      I need more info, please email me from the website, I need to know where you listen to the show from. Thanks.

      Jerry Reynolds, President
      Car Pro Radio Network

  14. Wade 4 years ago

    Have a 2013 ram 2 dr express 5.7L has 23,000 miles owe $36,000 do you know any dealer in my area that could help me get in a Jeep Wrangler my zip code is 22960

    • Jerry 4 years ago

      No sorry, I only have dealers in the areas the show airs.

      GOOD LUCK!

      Jerry Reynolds, President
      Car Pro Radio Network

  15. dmc 4 years ago

    I have a 2014 grand Cherokee SRT. I paid approx 65,000 for the car. The problem is that the engine failed and has to rebuild for it to run….I didn’t have car not even a year. I was looking into a ranger Rover sport. Do you think it’s a good idea to trade in the SRT. I’m really over this car!!

    • Michele Sanders 4 years ago

      Sorry to hear about the Jeep, that’s very unusual. I would get the engine repairs completely done and it running good before trying to trade it. It’ll bring more money that way.

      The Sport Rover is awesome. Certainly I think you’d really love it, everyone does.

      Let me know if I can help further.

      Jerry Reynolds, President
      Car Pro Radio Network

  16. Nena 3 years ago

    I have a gmc terrian with body damage. And high miles owe 15.900..looking at a Nissan I know I wont get the good condition value because of body damage. So how can I get a fair trade offer?

    • Michele Sanders 3 years ago

      Talk to the Nissan dealer that is associated with me, you’ll find them under CERTIFIED DEALERS. They’ll only knock off the cost of the damage from what the Terrain would normally be worth. If the damage is 25% more than your deductible, I would make an insurance claim before trading it.

      Hope this helps, thanks for listening to the show!

      Jerry Reynolds, President
      Car Pro Radio Network

  17. Francisco 3 years ago

    I bought a dodge charger 09 still paying for it could I trade it in for another car like a suburu wrx sti ???

    • Michele Sanders 3 years ago

      Most likely that will work out for you, much will depend on the Dodges true value versus how much you owe. We have good Subaru dealers in many markets, check under CERTIFIED DEALERS on this site. Our dealers will take good care of you.

      Thanks for listening!

      Jerry Reynolds, President
      Car Pro Radio Network

  18. Michael 2 years ago

    Hello …..question- I have a 2015 Suburban LT 4WD with 25,000 miles and still owe 44,000 on it. I wanted to trade it in for a less expensive SUV around 37,000 brand new. Is that possible to do?? Exterior and interior are in great shape. What would be a problem with trading it in?

    • Michele Sanders 2 years ago

      It will all depend on the true value of the Suburban versus what is owed. If you have CarMax in your area, run it by there for their free cash offer and let me know what they say. If you owe more than it’s value, trading down will not lower your payment most likely.

      Jerry Reynolds, President
      Car Pro Radio Network

  19. Gilberto 1 year ago

    I am trying to trade in my 2017 Honda Civic for something with more room but the car is worth 14000 and I would have 4500 in nigative Equityi don’t mind have long to pay an extra 100 a month but what would be my odds of getting approved I was thinking of trading it in for a 2017 Malibu

  20. Janie Gonzales 12 months ago

    I have a 2003 Dodge Durango that I want to trade in it’s in good condition runs well interior is kind dirty but runs well. Want to know what I can do to get into an SUV like a 2007 2008

  21. Gigi 9 months ago

    I have a 2014 Jeep Compass. I am in this jeep upside down. the trade in value is $9,395 and I owe around $25,000.00. I have tried to get in refinance but due to my credit, I can’t get it refinance. I need my payments $200.00 less a month than what I am making now. I was told that it is easer to get into a new car verses a use car. Is it a good idea to try to trade or am I stuck with these payments/

    • Amy Plemons 9 months ago


      You are in an impossible situation. No lender will allow you to roll $15,000 into a new loan and even if they would, just the amount you are upside down would add $350 per month to the next payment, so your payment would go up, not down. Your best bet is to hang on. Hopefully, the balance owed will drop quicker than the value of the vehicle. I wish I had better news.

      Jerry Reynolds, President
      Car Pro Radio Network

  22. Maira garcia 7 months ago

    Hi i have a 2013 bmw 550i, i owe $28,000 and its worth $16444, the only reason i want to trade it in is because i just had a very expensive repair so i want to trade it in for something cheaper, i realize its $12000 negative but i would have a new car with no need for repairs?? What do you recommend? Thank you!

    • Amy Plemons 7 months ago

      Hi Maria! Here is a more recent article that may help you :


      • Amy Plemons 7 months ago

        Maira, unless you’ve got a good amount of cash to go with the BMW, I would not recommend trading right now. Even if you could find a lender that would allow you rolling that much into a new loan, it’ll throw you into a high interest rate. I wish I had better news for you!

        Jerry Reynolds, President
        Car Pro Radio Network

  23. Dakota M. 4 months ago

    I have a 2015 Chevy Sonic LT that I bought at a dealership here in TN after my old car decided that it’s time was up, I would up with a car that had 43K miles when I got it. The interest is ridiculously high at almost 26% and if I was to pay it off in cash today I would need over $12K for a car that’s maybe worth $5-6K giving the mileage is now almost at 99K. No dealership in Tennessee or Georgia will allow me to trade in, nor any lender will refinance it. What options do I have as a consumer?

    • Car Pro 4 months ago

      I am sorry you are in this position. Your only options are to come up with a pretty substantial down payment OR continue to make payments until the balance and the value get closer together.

      I wish I had better news.

      Jerry Reynolds, President
      Car Pro Radio Network

  24. Olga cancel 3 months ago

    I have a 2011 Nissan rough AWD 87,000 miles on am trying to trade in but am stills own 9,224 on it value of my car is 4,000 any chances of been aprove for a new car that cost 22,000

    • Car Pro 3 months ago

      Olga, if you have very good credit, yes. Just know that $22000 car will become a $27000 car when you roll in the negative equity and that will have an effect on your new payment. Use one of my dealers for the best shot at making this happen.

      Jerry Reynolds, President
      Car Pro Radio Network

  25. James 1 month ago

    I have 4,000$ left to pay on my lease and am going to wind up going over my miles, i have a 2016 Ram Rebel, the value of it with the allotted miles should equal 30,000$, will I have any trouble trading it into a dealership early to finance a 2008 Ford Ranger that’s worth 9,000$?

    • Car Pro 1 month ago

      It’s hard to say, there is a lot of missing info here, but I would say you probably won’t have any problems. I hope that is a REALLY nice Ranger, that’s a lot of money for 2008.

      Jerry Reynolds, President
      Car Pro Radio Network

  26. Joel 2 weeks ago

    Hi, I just recently decided to trade in my 2016 GMC 2500 Denali 4×4 Z71 package in excellent condition with 21k miles. We decided to purchase a used 2018 Chevrolet Surburban 4×4 Z71 for $52,900, the value of my truck online is same at what I paid in 2016 $56,000. The dealer wants to give me a trade in for my truck for $48,500, and I feel like they trying to take advantage of me. If my used truck costs $56,000 in 2016 and now in 2018 my truck still costs the same, what’s going on with this deal. It seems like they gave me a lowball offer so they can sale the truck for a big profit. I only owe $45,000 but I’m confused with what I should do with it. Either sell it or trade it in somewhere else. A friend told me that I’ll save some money on taxes if I trade it in, but I have an appointment with my accountant next Monday to see if the depreciation helped out my business or what.


    • Car Pro 2 weeks ago

      As i talk about on the air all the time, none of the online used car sites are accurate. They don’t buy cars and have no skin in the game.

      Not sure where you are located but if there is a CarMax near by, run by there and see what they’ll write a check for, That’s a good barometer.

      Jerry Reynolds, President
      Car Pro Radio Network

  27. Penelope 1 week ago

    I have a 2012 dodge avenger. I owe a little under 12k on it and I’ve been to several dealers who have all said they would only do 3k for a trade in which would leave me with quite a bit of negative equity. I really want to get in to a newer car with lower miles but I’m not sure how to go about it where my payments won’t be super high. Would it be better to try and refinance to get lower payments and then get a separate new car loan? I’m not sure how to get in to a different car without paying tons more.

    • Car Pro 1 week ago

      Good to hear from you. There is no magic answer here to be honest. The $9000 you are upside down has to be dealt with, it won’t just go away. Your best bet is to keep the Avenger, send as much extra money in with the payments as you can, this will reduce the payoff much quicker, and a year from now, this will look very different. The good news is your car will not depreciate much in the future, you just need to work on getting the payoff down quickly.

      Jerry Reynolds, President
      Car Pro Radio Network

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