Owe Too Much On Trade - Negative Equity - Upside Down

Everyone that has ever purchased a car and traded another that there was a balance on has heard one of these phrases. "You are Upside Down," "You have Negative Equity," "You owe more on your Trade than it is worth."

Let me first explain what Negative Equity is and how to help reduce this Upside Down aspect of a car deal. Negative Equity is simply owing more on your Trade than it is worth. When you trade with Negative Equity, you are obviously going to have Negative on the next Trade In. It is a ripple affect that keeps following you. You had $3000 negative on your trade, now you have $8000 negative the next time, etc...
Also, let me say, you are NOT alone! We are in an age when nobody wants to put money down, and wants the lowest payment possible--stretching their contract out to 72 months and even 84 months with some banks.

The VERY FIRST thing to make sure you eliminate some negative is to MAKE SURE you get the best deal possible on the car you are buying. You have to visit Yahoo! Autos and get a FREE CAR QUOTE on your car of choice. It is a FREE service so you have nothing to lose and everything to gain. You fill out a short form with the vehicle of your choice, some contact info, and choose all the dealers in your local area to give you a quote on this vehicle. They will fight for your business and you will not believe what prices you will receive. This is by far the best advice because the lower the price you buy for, the less negative you will take with the car.

Next, You want to put money down if at all possible. Customers have this illusion that money down goes in the dealers pockets. NOT! This is your initial investment that will lower your amount financed and lessen the negative right out of the gate. Also, pick a shorter term of financing. If the payment is too high, pick a cheaper vehicle! Do not finance for 72 months--do 60 months MAX! If you have already done a 72 month contract, pay extra every month. Pay $50, $100, even $200 extra per month. You will eventually get your vehicle down to what it is actually worth.

Remember, Cars Depreciate! If you choose long term financing, do not put money down, they will Depreciate faster than you can pay for the car.

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