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Negative Equity & Trade-In Calculator

See whether your trade-in has positive or negative equity and what happens if a remaining balance is rolled into another car loan.

TRADE POSITION / 02

Current vehicle

Use an actual trade estimate when possible.
$
$

Replacement vehicle

$
$
%
%

TRADE-IN POSITION

$0.00

Enter the current loan balance and trade-in value.

,equity status

Trade-in breakdown

$0.00

Loan balance$0.00
Trade value$0.00
Negative equity rolled in$0.00
Positive equity available$0.00

Replacement loan estimate

$0.00 / month

Vehicle + estimated tax$0.00
Cash down$0.00
Estimated amount financed$0.00
Total interest$0.00
Total of loan payments$0.00

Negative equity can make the next car more expensive before you even drive it

Your trade equity is the difference between the vehicle's trade-in value and the amount still owed on its loan. If the vehicle is worth more than the balance, the difference is positive equity. If the balance is higher, the difference is negative equity.

Rolling negative equity into a replacement loan does not erase it. It adds old debt to the amount financed on the next vehicle. That can raise the payment, increase total interest and make it take longer before the new vehicle has positive equity.

What this estimate assumes

DriveMath applies the entered tax rate to the replacement vehicle price, then adjusts the amount financed for cash down and trade equity. Tax treatment of trade-ins varies by province, state and transaction structure, so this is a planning estimate rather than a dealer worksheet.

Before trading, obtain a current payoff amount from the lender and more than one valuation for the vehicle. A dealer trade offer, private-sale value and online estimate can be different. Even a small change in trade value can materially change the equity position.

Example$18,000 owed − $15,500 trade value = $2,500 negative equity

If that $2,500 is added to the next loan, you are financing part of the old car while paying for the new one.

Questions

Before you use the result

Can a dealer pay off my old loan?

A dealer can often arrange the payoff as part of the transaction, but any shortfall between the payoff and trade value still has to be covered by cash or added to the new financing.

Is negative equity always a reason not to trade?

Not automatically, but it changes the economics. Compare the cost of keeping the current car with the cost of rolling the shortfall into a replacement loan.

Does this calculator include dealer fees?

No. Add documentation, registration, warranty or other financed fees to the replacement vehicle price if you want them reflected in the estimate.

Keep calculating

Car paymentDepreciation calculatorOwnership costPayoff guide

DriveMath provides planning estimates, not financial, tax, legal or vehicle-valuation advice. Verify rates, taxes, fees, values and lender terms before making a transaction.