Negative equity calculator
Negative equity is the paperwork name for being upside down: owing more on the loan than the car would sell for. Dealers resolve it by rolling the shortfall into the next loan, which makes it disappear from the conversation and reappear in every payment. This page prices that move before you make it.
Owe $22,000 on a trade worth $14,000 and $8,000 rolls into the next loan. On a $30,000 car over 60 months, that rolled amount alone adds about $169 a month at 9.64% APR over 60 months (7.29% to 11.99% for your credit). You keep paying for the old car inside the new one, every month, for the whole term.
Rolled into the new loan
$8,000
what you still owe on the old car after the trade
New amount financed
$41,925
the $30,000 car, tax, and the rolled shortfall
Upside down on the new loan
34 months
until the loan drops below what the car is worth
What the new deal costs to carry, every month
$1,512/mo all-in
9.64% APR60 months7.29% to 11.99% for your credit
$1,503 to $1,522 a month, depending on the insurance quote you actually get
All-in means the loan payment plus insurance in Toronto, fuel, maintenance and licensing, on the same assumptions the main calculator uses: a used vehicle, good credit, nothing down unless your equity puts something down for you.
How long would you be upside down?
A car loan and a car’s value fall at different speeds, and rolling a shortfall starts the new loan already behind. The guide to long loans and negative equity works through the same mechanism when it is the term, rather than a trade, that digs the hole.
Should you roll it in at all?
Sometimes it is the least bad option, and this page will not pretend otherwise. But price the alternatives before the finance office prices them for you. Keeping the current car until the loan crosses what it is worth costs nothing extra a month. Paying the shortfall in cash keeps the new loan the size of the new car. Choosing a cheaper next car shrinks every number on this page at once. Rolling it in is the only option that charges you interest on a car you no longer own, and the month-one gap above is what you would owe on top if the new car were written off early.
Trade-in offers also run low before they run fair. If the number feels like a lowball, price the car privately first: the gap between a dealer’s offer and a private sale is often bigger than the tax saving a trade brings.
Run your own numbers
Take it to the full calculator
This deal, trade and all, opens in the full calculator with the term, the city, the credit band and every other input yours to change. That is where you see the verdict on the whole picture, not just the rollover.
Open this deal in the calculator