Positive & Negative Equity

If you have a trade you will undoubtedly hear the terms positive and negative equity. But what do these terms mean?

Positive equity is when you owe (for example) $4,000 on your trade and it is actually worth $6,000. This would mean that you have a positive equity in your car of $2,000 that you can use as a down payment on your next car.

Negative equity is when you owe (for example) $10,000 on your trade but it is actually worth $4,000. This means you have a negative equity of $6,000 that would be added on to the cost of your next car.

The most accurate way of determining if you have positive or negative equity will be to get your ten day payoff and then have your vehicle appraised by the dealership.

If you want to get a general idea as to your equity before you go into the dealership, I would suggest you read on another page about trades to better understand that process.

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