Negative Equity Car Loan
A negative equity car loan is something that happens to people in Tacoma, WA within the first year of financing a vehicle. This typically occurs when a person buys a car at a great price that was at or below blue book value. However, the day comes when they go to trade it in or refinance it and find that they owe much less than what it is worth. Negative equity is something that plagues many first time auto loans; it decreases the chances for a decent trade in amount as well as the possibility of refinance when it is needed. There is some hope however; for those who suffer from a negative equity car loan. Some of the basic reasons for negative equity are:
- Decreasing value of the vehicle
- Late payments
- High interest rate
- Long term loans
On paper a negative equity car loan may look like it is the end of the world, but there are options for those who are upside down in their current auto loan. The main thing to do is to simply keep paying on the vehicle until the amount is paid down enough or paid off altogether. Another way is to sell it outright and attempt to get what you owe out of it. The final way is to get a deal at Dougs Credit Center so that your negative equity and price of your vehicle equals the value of the new car so it no longer shows negative equity.
Selling Your Car with Negative Equity
Many people around Tacoma do not think that they will be able to sell their car when they have negative equity in it, but there is hope. Most buy here pay here used car dealers will offer the trade-in value of a vehicle, which is not the traditional blue book value that they are often sold for. This allows you to sell the car for more than what the dealership will give you, any amount up to blue book value is often acceptable for a private party.
The best option for those who are upside down is to simply through a “For Sale” sign in the back window, throw an ad out online and hope to get what you owe. This process can take a while however; and will take several steps to get into your next vehicle which leaves the other option of trading in with negative equity.
Trading your Car with Negative Equity
Trading in your car with negative equity is tricky but it can be done. The best way is to find a new car with an insane amount of rebates so that your negative equity combined with the asking price will equal the price the vehicle is worth, thus, allowing you to get into a brand new car loan without any negative equity. The other way is to find a used car that also has a asking price that is dramatically less than that of its value. There is one other way and that is to simply cash out of the negative equity with a large down payment. In any case, it is highly possible to get out of your negative equity loan if you know how to do it.