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Is there a way to trade in your car if you are upside-down on the car loan?


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Wiki User
2012-08-02 20:22:54
2012-08-02 20:22:54

Yes, but the money you still owe (negative equity) must still be paid. Example: you owe $10k on a car and the dealer will only offer you $8k in trade - the $2k difference must be paid. In some cases, your lender or dealer financing will allow you to roll the negative equity into the new payment as long as the loan to value (LTV) does not exceed a certain percentage. Therefore, it is difficult to get into a less expensive vehicle because of the LTV threshold. Dealer advertisements claiming to pay off your trade are simply doing as described above, and this can be dangerous for those with eyes bigger than their wallets.

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because they were born that way baby

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One way or another, the loan has to be paid off. If you trade the car in, you can get the payoff added to the amount financed on the new car.

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Since the car is financed, it already is collateral for a loan. Your car loan uses the car as collateral for that loan. I think the only way for you to use the car as collateral for a different loan is to have the NEW lender pay off your car loan, tack the ammount of the car loan on to the new loan you are getting, therefore they would then be the leinholder on the car.

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If it's just lost, you can ask for a replacment. If a bank is holding the title as security for the loan, you'll have to work that out with the bank.


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