What happens when you have negative equity in your car and you want to trade it in for a different vehicle?

I've been underwhelmed with my experience with a Volvo and I want to try out a different make and model, but my vehicle has neagtive equity. How would a trade-in work?

Answer
“Even if you have negative equity, you can still trade in your car most of the time. If possible, the best plan of action is to roll the negative equity into the new car loan. If that’s not possible, you should seriously reconsider the timing of your trade-in.
Without the ability to roll the balance left over from your old loan into a new loan, you’ll usually have to pay off the remaining balance in a lump sum. If you don’t have the cash for this, you may want to wait to purchase a new car and keep making payments until you have positive equity, or at least reach a breakeven point. “
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Eric Schad
Answered on Apr 07, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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