Can I Upgrade My Car if I Haven't Paid It Off Yet?

Buying a new car is exciting, but what if you’re still making payments on your current vehicle? The good news is that you can upgrade your car before paying it off — you just need to understand how the process works and what it means for your loan. At LincOne Federal Credit Union, we help members in Lincoln and Lancaster County find smart auto loan solutions that fit their budgets.

Can I Trade In a Car I Haven’t Paid Off?

Yes, you can. Many people trade in vehicles while they still owe money. The key is knowing whether you have positive or negative equity in your car:

• Positive Equity: If your car is worth more than what you owe, the difference goes toward your new car purchase.
   

• Negative Equity: If you owe more than the car is worth, the balance can roll into your next auto loan.
   

At LincOne, we can help you understand your payoff amount and whether trading in now is the best move.

What Happens to My Current Loan Balance?

When you trade in a car, your current lender (or LincOne, if we hold your loan) will provide a payoff amount, the total you still owe.

• If your trade-in value is higher than the payoff, the leftover value reduces the cost of your next vehicle.

• If your payoff is higher, the difference (negative equity) is added to your new loan.

This is why checking your numbers first is so important. You don’t want surprises at the dealership.

Should I Refinance My Auto Loan Instead of Upgrading?

Sometimes upgrading isn’t the best option right away. If your main concern is a high monthly payment or high interest rate, refinancing your loan with LincOne could be a smarter step.

Refinancing may help you:

• Lower your monthly payments

• Reduce your interest rate

• Shorten your loan term so you can pay it off faster

If your car still meets your needs, refinancing can save you money until you’re ready to trade in.

Tips for Upgrading Your Car with an Existing Loan

If you’re thinking about upgrading, here are a few steps to take first:

1. Check your car’s value. Tools like Kelley Blue Book can give you an estimate.

2. Get your payoff amount. Contact your lender for the exact figure.

3. Consider timing. Waiting a few months of payments could reduce negative equity.

4. Review your budget. Make sure a new loan (and potentially higher payment) fits your financial plan.

5. Shop smart. Compare rates and terms. Credit unions like LincOne often beat dealership financing.

Is It Better to Pay Off My Loan Before Upgrading?

It depends on your situation.

Pros of paying off first:

• You’ll own the car outright, giving you more trade-in flexibility.

• No risk of rolling negative equity into your next loan.

Cons of waiting too long:

• You may face rising maintenance and repair costs.

• Safety features and fuel efficiency in newer models could save you money long-term.

At LincOne, we’ll help you weigh the pros and cons so you can make the best decision for your budget and lifestyle.

How LincOne Federal Credit Union Can Help

As your local credit union in Lincoln, we put our members first. That means:

• Competitive auto loan rates that save you money

• Flexible refinancing options for better terms

• Guidance you can trust. Our team of local experts, our Relationship Advisors, will walk through your loan, payoff amount, and trade-in options with you

Whether you’re looking to upgrade your car or lower your monthly payment, LincOne is here to help every step of the way.

Your Next Step Toward a New Ride

You don’t have to wait until your car loan is paid off to get the car you want. With the right strategy, and a trusted partner like LincOne Federal Credit Union, upgrading your car can be simple and financially smart.

???? Ready to explore your options? Check out our Auto Loans here or start your vehicle search today.