Negative Equity Calculator

When you owe more on a car loan than the car is worth, that gap is called negative equity — and trading in that car for a new one means rolling that debt into your next loan. Enter your current car value, current loan balance, new car price, down payment, interest rate, loan term, and taxes & fees into the Negative Equity Calculator to see your monthly payment. Secondary outputs include your negative equity amount, total loan amount, total interest paid, and total cost of the car.

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What your car is worth today

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Amount you still owe on current loan

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Annual percentage rate for new loan

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Sales tax, title, registration, dealer fees

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Monthly Payment

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Negative Equity Amount

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Total Loan Amount

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Total Interest Paid

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Total Cost of Car

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Frequently Asked Questions

What is negative equity in a car loan?

Negative equity occurs when you owe more on your car loan than the car is currently worth. This is also called being 'upside down' or 'underwater' on your loan. It commonly happens due to rapid depreciation in the first few years of ownership.

Should you roll negative equity into a new car loan?

Rolling negative equity into a new loan increases your monthly payments and total interest costs. It's generally better to pay off the negative equity separately if possible, or wait until your loan balance matches your car's value before trading.

How does negative equity affect my new car payment?

Negative equity is added to your new car's purchase price, increasing the total loan amount. This results in higher monthly payments and more interest paid over the life of the loan.

Can I avoid rolling negative equity into a new loan?

Yes, you can pay off the negative equity amount in cash at the time of trade, or continue making payments on your current loan while financing the new car separately. Some dealers may also offer cash incentives to help cover negative equity.

What should I do if I have significant negative equity?

Consider keeping your current car longer until you owe less than it's worth, make extra principal payments to reduce the balance faster, or save cash to cover the negative equity amount when you trade.

How can I prevent negative equity on my next car loan?

Make a larger down payment, choose a shorter loan term, avoid financing add-ons and extended warranties, and select a vehicle that holds its value well. Making extra principal payments early in the loan also helps.

Will rolling negative equity affect my interest rate?

Possibly. A higher loan-to-value ratio from rolled negative equity may result in a higher interest rate. However, your credit score and other factors are typically more important in determining your rate.