The Loan WeekNegative equity car trade-in calculator
You owe more on your car than the dealer offers for it. See where that gap goes: into the new loan, into your cash, or into a sale, next to keeping the car you have.
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You owe more than the trade-in offer by
$3,200.00
Unless you pay it in cash, this gap is added to the new loan and earns interest at the new rate.
- New loan with your cash
- $31,900.00
- Monthly payment
- $631.66
- Cash to keep the gap out of the loan
- $3,200.00
Source: Your entered quotes; FTC and CFPB trade-in guidance. Illustrative defaults until you enter your own quotes.
Where the gap goes
The dealer offers $15,000.00 for a car with a $18,200.00 payoff, so $3,200.00 of the old loan is not covered by the trade-in. Somebody has to pay it, and in a trade that is you: either in cash today or inside the new loan.
| Replacement car price | $30,000.00 |
|---|---|
| Sales tax quoted | + $1,200.00 |
| Dealer, title and registration fees | + $500.00 |
| Payoff sent to your current lender | + $18,200.00 |
| Trade-in offer | − $15,000.00 |
| Needed before your cash | $34,900.00 |
| Your cash applied | − $3,000.00 |
| New loan | $31,900.00 |
Paying another $3,200.00 in cash brings the new loan to $28,700.00. The payment drops by $63.36 a month and lifetime interest by $601.83, at the same 7.00% rate and 60-month term.
The new loan is 106% of the replacement car's price. You would start the new loan owing more than the price of the car, before it loses any value.
Options side by side through month 24
Each column starts today and stops at the same month. They leave you with different cars, or none, so the lowest number is not automatically the better choice.
| Measure | Keep current car | Trade in, your cash | Trade in, gap paid in cash | Sell privately |
|---|---|---|---|---|
| Car afterwards | The one you have | Replacement | Replacement | None; other transport |
| Cash at signing or sale | $0.00 | $3,000.00 | $6,200.00 | $1,700.00 |
| Loan balance to start | $18,000.00 | $31,900.00 | $28,700.00 | $0.00 |
| Monthly loan payment | $572.40 | $631.66 | $568.29 | $0.00 |
| Payments left on the loan | 36 | 60 | 60 | 0 |
| Loan payments to month 24 | $13,737.48 | $15,159.80 | $13,639.07 | $0.00 |
| Running or transport costs | $4,800.00 | $7,200.00 | $7,200.00 | $3,600.00 |
| Cash out through month 24 | $18,537.48 | $25,359.80 | $27,039.07 | $5,300.00 |
| Debt still owed then | $6,545.29 | $20,457.18 | $18,405.05 | $0.00 |
| Interest paid by then | $2,282.77 | $3,716.97 | $3,344.11 | $0.00 |
| Interest over the whole loan | $2,606.23 | $5,999.49 | $5,397.66 | $0.00 |
Selling it yourself
A $16,500.00 sale leaves $1,700.00 of the payoff for you to pay before the lender releases the title. This path buys no replacement car, so its cost is the $150.00 a month you entered for other transport, not zero.
Most lenders hold the title until the payoff arrives, so a private sale usually runs through the lender or a bank. Ask your lender how they handle it before you agree a price.
The CSV includes your inputs, the side-by-side totals and every month's loan balance. Copying the URL shares your inputs; query values can stay in browser history and hosting logs.
Method and limits
Trade-in amount financed = price + quoted sales tax + fees + payoff quote − trade-in offer − your cash. Cash is used only up to what the deal needs; anything left over stays with you. The gap-in-cash column adds cash equal to the negative equity, or to the whole remaining loan if that is smaller. It keeps the same car, tax, fees, rate and term, so the only difference is the extra cash.
Keep: the current payment is rebuilt from the principal balance, note rate and months left, then compared with your statement. The payoff quote is not used here because it includes interest to a payoff date. Trade and sale: the payoff quote is what settles the old loan. Payoff quotes expire; ask for one dated close to the signing day.
Loans are fixed rate, with monthly interest (annual rate ÷ 12) and a payment at the end of each month. Loan payments, running costs and cash at signing are added up to the chosen month. Principal repaid is part of cash out but is not a borrowing cost; the debt still owed is shown separately. After a loan is paid off it adds no more payments.
Not modeled: what either car will be worth later, insurance gap coverage, add-on products, dealer incentives, taxes on a private sale, credit approval and your credit score. Sales tax is the amount you enter because trade-in credit differs by state; the car loan calculator applies state rules where we have them.
Sources checked September 27 and 28, 2026. Publisher review due December 28, 2026, or sooner if the guidance changes.
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Questions
What is negative equity on a car?
It is the amount by which the loan payoff is larger than what the car is worth to a buyer. With a $15,000 trade-in offer and an $18,200 payoff, $3,200 still has to be paid by someone, and in a trade it is usually you.
Why use the payoff quote and not the balance on my statement?
The payoff quote adds the interest since your last payment and any charges, and it is only good until a stated date. The dealer or buyer must send that amount. The statement's principal balance is what keeps amortizing if you keep the car.
Is rolling negative equity into the new loan allowed?
Yes, it is common, but the old debt then becomes part of the new amount financed and earns interest at the new rate. Check the amount financed and down payment in the contract disclosures before you sign.
Which option is best?
The calculator does not choose. Keeping, trading and selling leave you with different cars or none, so the cash figures are not a like-for-like price. It shows what each path costs through the same month so you can weigh it against the car you would have.
Are my inputs saved?
The form uses a URL query, which can stay in your browser history and hosting logs. Scenario pages are private and no-store, and they never send your figures to analytics.
Sources
- CFPB: trading in a car that is not paid off. Payoff amount versus statement balance, negative equity rolled into the new loan, possible prepayment penalty and confirming the old loan is paid. CFPB last reviewed September 12, 2023; rechecked in a browser September 28, 2026.
- FTC: auto trade-ins and negative equity. The $18,000 owed and $15,000 value example, rolling the gap into the loan or the down payment, selling privately and keeping loan terms short. FTC, September 2023; checked September 28, 2026.
- CFPB: auto-loan amortization and term length. Monthly principal and interest; longer terms can lower payments while increasing interest.
Page calculations or content last changed September 28, 2026. Observation and retrieval dates are listed per source above. How we calculate.