How Do You Sell or Trade in Negative Equity Cars?


Quick Answer

Negative equity on a car loan often prevents a trade-in. By rethinking the car owner's budget and the loan, selling the car or taking advantage of incentives and rebates, the car owner can get rid of the old car and make a fresh start with a new car.

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Full Answer

The following are some options for dealing with negative equity cars:

  1. Keep the car
  2. Consider keeping the car and paying down the loan. Pay extra to reduce the loan balance.
  3. Sell the car to a private party
  4. Personally sell the car for the balance of the loan.
  5. Wait for rebates or incentives
  6. Trade the car in when the dealership has an incentive or rebate program to offset the negative equity, thus reducing the loan amount on the new car.
  7. Use "pay off the loan" incentives
  8. Trade the car in on a "dealer pays off the old loan" incentive. Use caution, however, to ensure that the dealer doesn't add the old loan balance to the new loan.
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