Trade-In With Negative Equity Explained

Trade-in with negative equity in the U.S. means your loan balance is higher than the trade value—you owe more than the car is worth. You pay the difference or roll it into the new loan. Here's trade-in with negative equity explained.

TL;DR Negative equity = loan balance > trade value. You pay the difference (cash) or roll it into the new loan (increases new loan amount and payment). Use autopremo.com negative equity calculator and trade-in calculator. Use autopremo.com.

What Negative Equity Is

Loan balance (what you owe) minus trade value (what dealer pays for the car) = negative equity. Example: owe $20K, trade value $16K = $4K negative equity. Use autopremo.com negative equity calculator to see your negative equity. Get your numbers at autopremo.com.

Pay the Difference or Roll It

Pay the difference in cash at trade-in, or roll it into the new loan (new loan = new car price − trade value + negative equity). Rolling increases payment and total cost. Use autopremo.com payment calculator to see payment if you roll. See payment at autopremo.com.

Bottom Line

Trade-in with negative equity = owe more than trade value; pay the difference or roll into new loan. Use autopremo.com negative equity calculator and trade-in calculator so you know your numbers.