To get rid of your auto loan s negative equity you could pay it off all at once out of your own pocket. Again be sure there is not a prepayment penalty included in the terms of your loan.
This post covers everything you need to know about negative equity and some tips for getting yourself back on stable financial ground.
How to get rid of negative equity on a vehicle. This can impact your ability to sell or trade in your car for a new one. For example if you owe 12 000 on your vehicle and the dealer offers 10 000 for the trade in you would make up the 2 000 difference to your lender. Negative equity on a car loan means that you owe more money than the vehicle itself is worth.
For example if you can find someone who will buy your car for 5 000 and you have 6 000 left on the loan supplement 1 000 of your own cash to completely pay off the rest of the loan. Check for auto loan refinance offers view estimated loan terms 3. It may be more painful in the short term but at least you ll have some equity to work with when you shop for a new vehicle later.
While you ll still have to cover your negative equity keeping your vehicle and paying off your loan can help you make the best of a bad situation. The simplest way to deal with a negative equity car is to fork over the difference between what you owe and what you can sell the car for.