Vehicle Buyers
Trade-In Loan Payoff and Negative Equity Explained
If your trade-in still has a loan balance, the dealership and lender need to settle payout details before final handover.
Key terms
- Payoff statement: the amount needed to clear the current loan.
- Negative equity: when the loan payoff is higher than trade-in value.
- Lien payout: the process of paying the existing lender.
What buyers should check
- Request the current payoff amount and date validity.
- Ask how negative equity is handled in your new contract.
- Confirm which documents prove the previous loan is closed.
Financing and legal terms vary by lender and province. Confirm details with your lender and dealership.