Question About Trading a Vehicle With Negative Equity!

Hi Tony,

My question is I want to trade in my car for one that is lower in payments. I also have negative equity on it.

What do you recommend I should do? Sorry if someone asked this already.

Jorge

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Hi Jorge,

It's almost impossible to trade down to a lower payment when you're upside-down (have negative equity) in your trade. During my career I tried hundreds of times to accomplish it for people, and succeeded maybe two or three times.

Of course it depends on how much negative equity you have. About the only chance you have is to buy an inexpensive new vehicle so you can stretch the payments out to 66 or 72 months, then hope you can tack on the negative equity. If you end up financing too much the bank won't approve the deal.

Even under this scenario, you may not be able to reduce your payment enough to matter, and if you do you will be absolutely buried in the new vehicle. Instead of trying to reduce your payment why don't you try to figure out a way to increase your income a few hundred dollars a month? It might be easier to do this then to get a reduced payment on a different vehicle.

Jorge, visit Trade-In Questions on my website for other questions and answers on this same topic.

Good luck . . .

Tony Iorio