Negative equity means the payoff amount is higher than the vehicle's trade value. If the gap is rolled into a new loan, you are financing part of the old car alongside the new one.
What is happening underneath
The old balance can disappear from the conversation without disappearing from the contract. It usually reappears inside the new amount financed.
Find thisExact payoff quote from the current lender
Then thisWritten trade-in allowance
Do not missNew contract amount financed
Your three moves
- Subtract the trade offer from the payoff quote.
- Locate that gap in the new contract.
- Compare waiting, paying the gap, and rolling it in.
Use this sentence
“Show me exactly where the old loan payoff and trade credit appear in the new amount financed.”
What to watch for
The old lender must actually receive payoff. Confirm the old account closes after the transaction.
Official starting points
Rules, programs, and deadlines can change. Start with the current official pages below and the documents in front of you.