How To Trade In A Car With Negative Equity. Instead car dealerships will commonly roll over your negative equity into your new auto loan. If the trade-in vehicle has 4000 of negative equity the dealer will pay off that loan and roll the same amount into the loan for the new vehicle.
None of the dealerships we spoke to would provide a specific negative-equity range or limit they would accept. Farah drove her car 140000 km over the last 4 years. If your current vehicle has 10000 in negative equity and your new car costs 20000 you will take out a 30000 loan from the lender.
Negative equity essentially means that the value of your car is lower than what you will be required to pay for the remainder of a finance plan and is more common in the early stages of a plan.
Delay the time when you are going to trade in the car until the loan amount comes down a bit or pay off the negative equity and trade in the car sooner. When your cars trade-in value is higher than the amount still owing on the loan its known as positive equity. Use an online negative equity auto loan payment calculator to find the long-term costs. Paying down the negative equity on the car as quickly as you can is better than the first two options because youre actually helping yourself get out of debt financially instead of just passing it through to your next payment.