The old balance carried into the new car
Show how unpaid trade-in debt increases the next vehicle loan.
Use a dated payoff and written trade value
- Dated payoff amount from the current lender
- Written trade-in offer
- Itemized out-the-door price for the replacement
- New-loan APR, term and cash down
Follow the shortfall into amount financed
Obtain a dated payoff.
Use a written trade value.
Compare with keeping or selling the vehicle separately.
Read the rollover beside payment and interest
Negative equity is added to the new transaction before down payment, increasing payment and interest.
Negative Equity on a Trade-In: Follow the Balance Into the New Loan covers the controlling document terms and questions outside this result.
Compare rolling the debt with waiting or selling
An underwater trade is added to a replacement loan
Subtract the written trade value from the current payoff, then include that shortfall in the replacement transaction. Compare the resulting payment and interest with a case that does not roll the shortfall forward. Verify the final contract because taxes, fees and lender advance limits may change the financed amount.
Transaction amounts the result does not add
- Taxes and fees
- Future vehicle value
- Lender loan-to-value limits