Keep it & pay it down
If your car still fits your needs, waiting and reducing the balance may help close the gap. Ask your lender how extra payments are applied and whether your loan has a prepayment penalty.
Negative Equity. No Drama. — Kiefer Kia in Eugene, OR
✓Clear answers.✓Real options.✓Your pace.
What is negative equity?
Negative equity means your loan payoff is higher than your vehicle's current value. You may also hear it called being “upside down.” It describes the numbers—not you.
Your vehicle's value can change over time. Comparing a current appraisal with a payoff quote from your lender helps you understand where you stand.
A little math.
A lot more clarity.
Loan payoff$25,000
−Vehicle value$21,000
=Negative equity$4,000
Example only. Your appraisal and lender payoff determine your numbers.
The No Drama Approach
Let's look at the whole picture.
- Confirm your payoff and trade value.
- Compare costs and realistic next steps.
- Decide what works for you—even if that means waiting.
Bring your current payoff, vehicle details and questions. We'll help make the numbers easier to understand. Shop at your pace. Ask lots of questions. Expect straightforward answers.
Good questions. Straight answers.
Can I trade in a car with negative equity?
Yes, it may be possible to trade in a vehicle even when you owe more than it is worth. Start by comparing a current payoff quote from your lender with your vehicle's trade-in appraisal. The difference is the negative equity that needs to be addressed.
You may be able to pay that difference out of pocket or, if a lender approves it, include some or all of it in new financing. Carrying it into a new loan increases the amount you borrow and can increase your total interest cost. Waiting and paying down your current loan may also be worth considering.
Not sure where you stand? Reach out to the Kiefer Kia team. We can review your trade value and payoff with you and explain potential next steps. No pressure. No judgment.
Will a lower payment mean a better deal?
Not always. A monthly payment is only one part of the picture. A longer loan term can reduce the payment while increasing the total interest you pay and extending the time it takes to pay off the vehicle.
Compare the vehicle price, trade allowance, remaining balance from your old loan, down payment, APR, loan term, amount financed and total of payments. That helps you see whether a lower payment also means a lower overall cost.
Want help comparing the numbers? Ask our team to walk through them with you. We'll help you understand the differences so you can decide what fits your budget.
Does leasing erase negative equity?
No. Switching to a lease does not erase the amount you still owe on your current vehicle. The shortfall must still be addressed. If a lender allows it to be included in a lease, that balance becomes part of the lease's cost rather than disappearing.
Before choosing a lease, review the total due at signing, monthly payments, total cost, mileage allowance and possible end-of-lease charges. Also ask exactly how any negative equity is being handled. A lease may fit some driving needs, but it is not a way to make an old balance go away.
Have questions about leasing versus financing? Contact Kiefer Kia for a straightforward explanation of the options that may be available, subject to lender approval.
How do I find my current payoff?
Contact the bank, credit union or finance company that holds your auto loan. You may be able to request a payoff quote through its website, app or customer service team. Ask for a quote valid through the date you expect the loan to be paid off.
A payoff quote can be different from the balance shown on your statement because it may include interest through the payoff date and other amounts due under your agreement. Check the quote's expiration date and confirm payment instructions directly with your lender.
Need help knowing what to request? Reach out to our team. We can explain what information is useful when reviewing a trade-in. Your lender is the source for your official payoff amount.
Learn more: Consumer Financial Protection Bureau auto loan resources.
Financing subject to credit approval and lender terms. Trade values vary. This guide is for general information. Illustrative imagery.