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Trade-in payoff

The dealer took your trade-in but never paid off the old loan?

When you trade in a car that still has a loan, the dealer usually promises to pay that loan off. If it does not, the old loan stays open until someone pays it. This page covers what to check first, the deadline a few states set for the dealer, and where to complain. It is free, and every rule links to the official page it comes from.

Check the old loan firstSee state deadlines
First

Until the old lender shows the loan paid, treat it as open

A dealer's promise is not a payoff. Three official pages put it in their own words.

  • CFPB After a trade-in, the CFPB says to “ensure your original loan has been completely paid off and you don't have any outstanding payments.” CFPB: Should I trade in my car if it's not paid off? ↗
  • FTC “Some car dealers say you won't be responsible for the remaining balance on your old car loan when you trade in your old car. But that might not be true.” FTC: Auto Trade-Ins and Negative Equity ↗
  • Georgia Attorney General, Consumer Ed (2023) “until the dealer pays off your old loan, you will remain responsible for maintaining insurance and making all payments on your old vehicle.” This is Georgia's answer, and other states may differ. Georgia Consumer Ed ↗

This page is not legal advice. For your own situation, ask a private attorney or your state attorney general.

Then

Ask the old lender whether it was paid

The CFPB's steps for a trade-in, with one addition marked as ours.

  1. Find the right department. The CFPB says to find out which department at your existing lender can confirm that your old loan has been paid off once you have finalized the agreement for the new loan.
  2. Wait about a week, then check. The CFPB says to wait one week and contact the old lender to check that your previous loan has been paid off. Our addition: ask for a paid-in-full letter or another written confirmation, and keep the date you asked.
  3. If it is not paid, call the new lender. The CFPB says to contact your new lender to learn more.
  4. Keep the dealer's promise in writing. Georgia's Consumer Ed advises getting a promise in writing from the dealer about the payoff date, and following up with the lender to be sure the payoff was actually made.
By state

What these states say a dealer must do

We list a state only when we could read its rule on an official page on Oct 7, 2026. The quote in each row is copied from that page.

Deadline for a dealer to pay off the loan on a trade-in, by state
StateWhat the source saysWhen it appliesOfficial source
FloridaPay and satisfy the outstanding lien within 10 working days of acquiring ownership.

The clock starts when the dealer acquires ownership of the vehicle.

Source text A motor vehicle dealer acquiring ownership of a motor vehicle with an outstanding purchase money lien, shall pay and satisfy the outstanding lien within 10 working days of acquiring ownership. [...] The provisions of this paragraph shall not apply to electronic transactions pursuant to subsection (9).
A motor vehicle dealer acquiring ownership of a motor vehicle with an outstanding purchase money lien. The same paragraph says: "The provisions of this paragraph shall not apply to electronic transactions pursuant to subsection (9)." Ask FLHSMV or a private attorney whether that covers your trade-in.Fla. Stat. 319.24(5)(a) ↗Checked Oct 7, 2026
GeorgiaNo time frame is set by law for the dealership to pay off the loan on a trade-in, according to the Georgia Attorney General's Consumer Ed.

There is no clock to count. The page advises getting the payoff date in writing from the dealer.

Source text There is no time frame set by law for the dealership to pay off the loan on a trade-in, but there may be consequences for the dealer if it delays payment once your new loan has been funded.
Georgia. This is an answer from the Attorney General's Consumer Protection Division (Consumer Ed), not a statute, and it is dated June 27, 2023.Consumer Ed, Georgia Attorney General's Consumer Protection Division, June 27, 2023 ↗Checked Oct 7, 2026Page dated Jun 27, 2023
MontanaPay the secured party by the earlier of 21 days from the date of acceptance of the motor vehicle in trade, or 15 days from the date the dealer receives payment in full from the sale of the traded motor vehicle.

The clock starts on the date the dealer accepts the vehicle in trade, or on the date the dealer receives payment in full from the sale of the traded vehicle. Whichever deadline comes first counts.

Source text (1)(a) If a dealer accepts a motor vehicle in trade or purchase from a customer and there is an outstanding loan balance owing on the traded or purchased motor vehicle, the dealer shall remit payment to the secured party to whom the balance on the traded or purchased motor vehicle is owed in an amount sufficient to satisfy the perfected security interest on the traded or purchased motor vehicle by the earlier of the following dates: (i) 21 days from the date of acceptance of the motor vehicle in trade; or (ii) 15 days from the date of the receipt by the dealer of payment in full from the sale of the traded motor vehicle.
A dealer accepts a motor vehicle in trade or purchase from a customer and there is an outstanding loan balance owing on it.MCA 61-4-110(1)(a) ↗Checked Oct 7, 2026
TexasA retail seller must pay in full the outstanding balance of a vehicle traded in not later than the 25th day after the date the retail installment contract is signed and the buyer receives delivery, and the retail seller receives the trade-in and the documents to transfer title.

The 25 days run from the date on which both events have happened: the contract is signed and the buyer takes delivery, and the seller receives the trade-in and the title-transfer documents. That is the later of the two.

Source text A retail seller must pay in full the outstanding balance of a vehicle traded in not later than the 25th day after the date that: (1) the retail installment contract is signed by the retail buyer and the retail buyer receives delivery of the motor vehicle; and (2) the retail seller receives delivery of the motor vehicle traded in and the necessary and appropriate documents to transfer title from the buyer.
A retail seller, which Chapter 348 defines as a person in the business of selling motor vehicles to retail buyers in retail installment transactions. The text speaks of a retail installment contract, so it may not cover a cash deal or a loan you arranged yourself.Tex. Fin. Code 348.408(c) ↗Checked Oct 7, 2026
UtahNotify the lien holder in writing within 7 days that the vehicle has been traded in, and pay the lien holder within 21 calendar days of the date of sale, or within 15 days of receiving payment in full for the motor vehicle it sold, whichever date is earlier.

The clock starts on the date of sale, or on the date the dealer receives payment in full for the motor vehicle it sold. Whichever date is earlier counts.

Source text If a dealer takes a trade-in from a retail customer as part of the sale of a motor vehicle and there is an outstanding loan balance owing on the trade-in, the dealer must, within 7 days, notify the lien holder in writing that the vehicle has been traded in. [...] the dealer is required by Utah law to pay the lien holder for the trade-in vehicle either: within 21 calendar days of the date of sale, or within 15 days of receiving payment in full for the motor vehicle it sold, whichever date is earlier.
A dealer takes a trade-in from a retail customer as part of the sale of a motor vehicle and there is an outstanding loan balance owing on the trade-in.Utah Code 41-3-402, as the Utah DMV cites it ↗Checked Oct 7, 2026

These are the dealer's deadlines, as the sources word them. This page does not say what happens when a dealer misses one. Ask a private attorney or your state attorney general.

Check the new contract

Negative equity rolled into the new loan is not a payoff

If you owed more than the car was worth, look at where that balance went.

  • FTC Some dealers “just roll over the negative equity into your new car loan, so you still end up paying it.” The FTC says to look at the down payment and the amount financed on the installment contract, and adds: “If a car dealer told you they would pay off your car themselves, but they really rolled the cost into a loan, that's illegal. Report it to the FTC.” FTC: Auto Trade-Ins and Negative Equity ↗
  • CFPB If a dealer promises to pay off your negative equity, the CFPB says to make sure it is not included in your new financing or your final loan contract. CFPB: Should I trade in my car if it's not paid off? ↗
Complaints

Where to complain

Start with the CFPB's wording, then the agency named for your state.

The CFPB says: “If, after reasonable efforts, your loan has still not been paid off, you can submit a complaint to the Federal Trade Commission or the CFPB. You can also contact your state attorney general.”

Florida: Florida Department of Highway Safety and Motor Vehicles (FLHSMV)
FLHSMV's page for buying from a licensed dealer says to report issues receiving your tag and title immediately by faxing or mailing form HSMV 84901 to your nearest regional Division of Motorist Services office, listed on page 2 of the form. The page describes the form for tag and title problems, so ask the regional office whether it can take a complaint about an unpaid trade-in loan. FLHSMV: Buying from a licensed dealer ↗
Georgia: Georgia Attorney General's Consumer Protection Division
The Consumer Ed answer says to contact a private attorney immediately if the trade-in loan is not paid. It also lists the Consumer Protection Division at consumer.ga.gov, and by phone at 404-651-8600 or 1-800-869-1123 (toll-free in Georgia). Georgia Consumer Ed answer ↗
Montana: Montana Office of Consumer Protection
Its complaint page is an online form for a complaint about a business. It lists what to have ready: the business name, a copy of the contract and any supporting documentation. Montana Office of Consumer Protection: business complaint form ↗
Texas: Texas Office of Consumer Credit Commissioner (OCCC)
The OCCC's page says it assists consumers with complaints against the companies it regulates, including motor vehicle sales financing, and lists a Consumer Assistance helpline at 800-538-1579. It says it may not be in a position to help with every complaint, and that it will try to find the responsible authority and tell you in writing. OCCC: Complaint resolution ↗
Utah: Utah DMV Motor Vehicle Enforcement Division
Its dealer complaint page says to file the complaint online through the MVP portal under Enforcement (MVED), or to complete Form TC-451, Original Complaint Report, and send it by mail or email. The phone number on the page is 801.297.2600. Utah DMV: Filing a dealer complaint ↗
Old lender says it is paid

The loan is paid, but the lien still shows?

Once the old lender confirms the payoff, the lien release is a separate step. Build a free request letter with your state's rule and your lender's published channel filled in. We do not ask for your VIN or loan number.

Build the free letter

Trade-in payoff questions

How long does a dealer have to pay off the loan on my trade-in?
It depends on the state. Florida, Montana, Texas, and Utah each set a deadline for the dealer, worded differently, and the table above shows each one with its source, what it covers and any exception the text itself states. Georgia's Attorney General says no time frame is set by law there. A state that is not in the table may have a rule we have not published, so ask your state's motor vehicle agency or attorney general.
Am I still responsible for the old loan if the dealer never paid it off?
Do not assume the old loan was paid. The CFPB says to ensure your original loan has been completely paid off and you don't have any outstanding payments, and to contact the old lender about a week after the trade-in to check. The FTC warns that a dealer who says you will not be responsible for the old balance may not be right. Georgia's Consumer Ed says that until the dealer pays off your old loan, you will remain responsible for maintaining insurance and making all payments on your old vehicle. For your own situation, ask a private attorney or your state attorney general.
Where do I complain if the dealer does not pay off my trade-in?
The CFPB says: “If, after reasonable efforts, your loan has still not been paid off, you can submit a complaint to the Federal Trade Commission or the CFPB. You can also contact your state attorney general.” The state agencies named on the official pages we read are Florida Department of Highway Safety and Motor Vehicles (FLHSMV), Georgia Attorney General's Consumer Protection Division, Montana Office of Consumer Protection, Texas Office of Consumer Credit Commissioner (OCCC), and Utah DMV Motor Vehicle Enforcement Division.
Official sources

Where this page comes from

Read on Oct 7, 2026. Recheck each page before you rely on it, because rules change.