What is equity on a car loan?
I hear the word "equity" thrown around a lot in financial matters. What does it mean when it comes to car loans?
“Very simply, the equity on a car loan is the difference between the value of the car and the amount you owe on the loan. Using this definition, you can have either positive or negative equity in your vehicle.
The longer you’ve paid toward the loan, the better the chance that you have positive equity. Negative equity, which is also known as an upside-down car loan, typically occurs during the early few years of the loan.”
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