CAR FINANCE GUIDE

What does it mean to be upside down on a car loan?

Learn what negative equity means, how to calculate it and how rolling it into another loan affects the next car payment.

Negative equity in one formula

Vehicle value − loan payoff = equity. If the result is negative, the payoff is higher than the vehicle value.

Example

A vehicle worth $28,000 with a $32,000 payoff has about $4,000 of negative equity.

Why rolling it forward matters

Adding the payoff gap to a new loan raises the new amount financed before taxes and fees.

Calculate your loan equity

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