Negative Equity Calculator

What is Negative Equity?

Negative equity, also known as being "upside down" on your loan, occurs when you owe more on your auto loan than your vehicle is currently worth. This commonly happens due to rapid depreciation, especially in the first few years of ownership.

Common Causes of Negative Equity

• Small or no down payment
• Long loan terms (72+ months)
• High interest rates
• Rapid vehicle depreciation
• Rolling previous negative equity into a new loan

How to Avoid Negative Equity

• Make a down payment of at least 20%
• Choose shorter loan terms (36-60 months)
• Buy vehicles that hold their value better
• Consider gap insurance
• Make extra principal payments when possible