How To Trade-In Car with Negative Equity


Negative equity or being ‘upside down’ is when you have a car loan and owe more on the vehicle than it is currently worth. This can make trading in your car complicated. However, we have solutions for you! At Taz Loans, we want everyone’s automotive purchasing experience to be easy and stress-free. That is why we have outlined exactly what to expect when trying to trade in your vehicle with negative equity. Keep reading to learn more about your available options. 

Delay the Trade

Delaying the trade is a better option financially than paying off the negative equity. However, this only works if you are willing to wait to get a new car. If you choose this option, you can either hold off on the trade until you have saved up enough to pay off your loan, or you can make higher monthly payments until you are no longer upside down.

Pay Off the Negative Equity

If you want your new car immediately, you must pay off the negative equity. You can pay for it out of pocket or roll it over into your new car loan. 

Roll Over the Negative Equity into a New Car Loan

If you don’t have enough cash to pay for the negative equity out of pocket, you can opt to roll it over into the new car loan. However, this would mean that you are now borrowing more for your new car than it is worth, making it more likely that you will go upside down again with this loan. If a rollover is your only option, try to get a more affordable car, so you don’t have to borrow as much. Contact us to learn more about this option.