Lakeview, Washington
9915 South Tacoma Way
Lakewood, WA 98499
(253) 777-0620

A Brief Guide to Navigating Negative Equity & Trade-Ins August 9, 2018

Lakeview, Tacoma
A Brief Guide to Navigating Negative Equity & Trade-Ins, Tacoma, Washington

Negative equity is a common issue that can interfere with the process of trading in your vehicle. It typically happens when car financing and depreciation are at odds with one another, meaning you’ll have to pay off a balance before you reach eligibility. Below is a brief guide to the topic and how to get around the problem. 

What Is Negative Equity?

When you select a car financing option, you receive a loan in the dollar amount of the vehicle’s worth at the time of purchase. However, over the years, your automobile will decrease in value due to normal wear and tear, high mileage, or repair issues. For example, if the loan is for $20,000, but the car is now worth only $15,000, you’ll have a negative equity of $5,000 that you need to cover before trading it in.

How Should You Deal With It?

car financingThe easiest way to handle negative equity is to postpone your trade-in and keep paying off your loan bill. Increase the cost of monthly payments to get out of negative equity faster. Alternatively, the dealership may allow you to roll your negative equity onto a new car financing plan for a trade-in vehicle. Review the contract to make sure you understand the terms and conditions. When in doubt, enlist a car financing expert who will evaluate the situation and help you explore all available options. 


When you need car financing deals that will help you get a new vehicle quickly, turn to Curbside Motors in Lakewood and Tacoma, WA. The dealership offers excellent rates on certified pre-owned cars, trucks, and SUVs, and their professionals will help you find the right choice for your needs and budget. Call (253) 777-0620 to speak with a representative about their used cars and financing options. Visit the website to browse their inventory of dependable and affordable vehicles. 

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