Options for trading in a car with negative equity
Call your lender and ask for your payoff amount, and consider asking for the amount in writing, just to be safe. Next, determine the value of your car. Depending on your situation, you have three options:. If your car is worth more than the payoff price, congratulations!
You have positive equity, and can put that equity towards your new car. This is the best-case scenario for trading in a car with a loan. If, however, the value is less than the payoff, you have negative equity and are upside down in the loan. That is negative equity. First, you can pay the difference yourself, fully paying off the loan. Without the extra money to pay off the loan, however, you will need to roll the difference into the purchase of your next car.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront deposit, upfront fees or upfront insurance payments on a loan. To protect yourself, read more on this topic here. By Caitlin in Auto. Do your own research. When you go to speak with your dealer about trading in your current vehicle make sure you bring all the information and documents you need.
Do not lie about the condition of your vehicle, your dealer will more than likely find out later. What is Negative Equity? If you know that your vehicle has negative equity you should consider the follow before you decide to trade it in: If you still want to trade your vehicle in, make sure you ask your dealer how your negative equity will be treated. Loans, auto, credit and debt consolidation solutions for Canadians of any credit.
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