What's the best way to get out of negative equity on your car?

I have negative equity on my car, but I've been wanting to trade my vehicle in for a new car. How do I get rid of negative equity?

Answer
Also known as being upside down, negative equity is when you owe more on your car loan than the car is worth. However, getting on the right side of the loan only requires some extra budgeting and payments on your part.
To get positive equity to make the trade-in process easier and get some cash for a down payment, use these tips:
  • Double up on payments each month
  • Make a lump-sum payment each quarter
  • Round your payments up to the nearest $100
  • Make principal-only payments
By doing one or more of these, you should be able to shed the negative equity on your car loan.
If you’re searching for more ways to save money, don’t spend more than you have to on car insurance. Use the Jerry app to compare quotes from up to 50 providers, so you get the coverage you need at the best price.
Eric Schad
Answered on Nov 02, 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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