Selling A Car with Positive Equity
If you’re planning to trade in or sell your vehicle, understanding your equity position is crucial. One of the most favorable positions to be in is positive equity on a car—but what exactly does that mean? At Key Scales Ford, we’re here to help you make the most of your vehicle’s value, whether you’re ready to upgrade to a new Ford or simply exploring your options. Understanding car equity is also an important part of assessing your overall financial health.
What Is Positive Equity on a Car?
Positive equity on a car means that your vehicle is worth more than what you still owe on your auto loan. For example, if your car is worth $20,000 and you only owe $12,000 on your loan, you have $8,000 in positive equity. The equity is determined by subtracting the remaining loan balance from the car’s value. This equity can be applied to the down payment for a new vehicle, which reduces the loan amount and may lower your monthly payments.
What Is Positive Equity on a Car Loan?
Positive equity on a car loan is the same concept but focused specifically on your financing. It refers to the surplus value of your car compared to your outstanding loan balance. Having positive equity in your car loan puts you in a strong financial position when trading in or selling your vehicle.
How to Get Positive Equity on a Car
If you’re wondering how to get positive equity on a car, the key is to pay down your loan faster than your vehicle depreciates. Here are a few tips:
- Make a larger down payment when you first purchase the vehicle.
- Opt for a shorter loan term to manage a new car loan more effectively and reach positive equity sooner.
- Avoid rolling over negative equity from a previous vehicle.
- Keep up with regular maintenance to preserve your vehicle’s resale value.
Choosing a reliable brand like Ford—known for its strong resale value—can also help you build positive equity more quickly.
How Do You Know If You Have Positive Equity on a Car?
Curious about how do you know if you have positive equity on a car? It’s simple:
- Find out your vehicle’s current value using online tools or by getting a trade-in appraisal at Key Scales Ford.
- Check your loan payoff amount, which you can get from your lender directly.
- Subtract the payoff amount from your car’s value. If the result is a positive number, you have positive equity.
Our team at Key Scales Ford can help you calculate this and walk you through your options.
Make the Most of Your Positive Equity
If you have positive equity, you can:
- Trade in your car and apply the equity to a new Ford purchase.
- Sell your vehicle outright and pocket the profit.
- Refinance your loan for potentially better terms if your equity is strong.
Whether you’re eyeing a new Ford F-150, Ford Explorer, or Ford Mustang, using your positive equity can make your next purchase more affordable. Additionally, having positive equity can provide access to additional funds if necessary.
Explore Your Options at Key Scales Ford
At Key Scales Ford, we’re here to help drivers in Leesburg, The Villages, and beyond make smart vehicle decisions. If you’re asking yourself, “What is positive equity on a car?” or “How do I know if I have positive equity on a car loan?”—we’re ready to answer. Stop by today for a no-obligation appraisal and let’s see how your current vehicle can help you upgrade to something new. Understanding your vehicle’s current market value is crucial for making informed decisions about selling, refinancing, or trading in your car.
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