Can You Trade In a Car With Negative Equity?
When you owe more money on your car loan than your car is currently worth, you have negative equity in your vehicle. Many people wonder if they can trade in a car with negative equity. The answer is yes, but there are a few things you need to know first.
If you have negative equity in your car, the amount you owe will be subtracted from the trade-in value of your vehicle. For example, if you owe $10,000 on your car loan and the trade-in value of your car is $15,000, the dealership will give you a trade-in value of $5,000. This means you’ll still need to come up with $5,000 to put towards the purchase of your new vehicle.
One option to overcome negative equity is to roll the amount you owe into your new car loan.
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