It is illegal in most states to include negative equity in a new car loan but theres an easy way around this. If you dont have enough cash in the bank to pay off your negative equity a car dealer will sometimes allow you to roll your negative equity into your new car loan.
can you roll negative equity into a used car loan
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Lets say you owe 15000 on your car loan but your dealer is offering only 13000 for your trade in.
Can you roll negative equity into a used car loan. If you purchase a 15000 vehicle with an 18000 lending value you might be able to roll over 3000 in negative equity to your new loan if you secured a loan with a 100 percent loan to value ratio. The negative equity is simply added to the cost of the new car which almost certainly places the new car into a new negative equity situation but worse than before. The price you pay for a used car also affects your loan to value ratio.
But auto credit express has built up the nations largest network of special finance car dealers in the country. We have the dealers that know how to handle the trickiest of credit situations. You can apply the rebate towards the negative equity.
If you want a new car but still have an outstanding balance on your old car that exceeds the trade value of that car your dealer might be able to cover the difference negative equity in your new loan or lease as long as the amount is not too great relative to the financed cost of the new vehicle. The 2000 difference would be rolled into your new car loan. The short answer is yes you may be able to trade but a negative loan balance doesnt just go away regardless of what a dealer salesperson might tell you.
If the rebate is not enough to cover the negative equity then you still have to pay money out of pocket. If you have bad credit it can be extremely tricky to find a loan approval especially when you are dealing with negative equity. Roll over the negative equity into new loan.