Not everyone has their vehicle totally paid off when they come to the decision that they want to trade it in on another one. This is possible to do but there are some precautionary steps to take.
Keep in mind when you are trading in your vehicle you are giving the ownership of it over to the dealer. In order to be able to do this, you need to be the legal owner. In many cases, it is the finance company that has ownership of the vehicle until it becomes paid off.
The dealership is going to want you to produce all of the legal documents pertaining to your loan. If the trade in is going to go through without a hitch then the dealership ends up assuming the loan. Which they will pay off.
More Owing Than Trade In Value
It is not uncommon that one is offered a certain amount of money for the trade in but the amount owing on the loan is greater than this. The first step is to get the actual payout amount left on the loan. Then you need to look at the value in the red book that gives Canadians book value of the vehicle.
If you can see that you are not likely going to get enough to pay off the loan through the dealership then you will need to pay the difference. There will be a lot of paperwork to this but it is something that some dealerships are willing to take on. As for them, it means that you are going to be buying another car from them.
If the trading in of your used vehicle is complicated it is highly important that you ensure that once you pay the difference owing that you have no further obligations regarding the loan or the vehicle.