What exactly is negative equity? It is created when you owe more on a vehicle than it is worth, trade the vehicle in, and then roll the balance of the loan into the purchase of another vehicle.
Here is an example: You decide to trade your vehicle in on a newer model. The loan payoff is $20,000. However, your vehicle is only worth $15,000. You have negative equity of $5,000. And, in most instances, even if the dealer tells you that they are paying off your loan, the dealer will add that $5,000 to the purchase price of your new vehicle. As a result, your loan and your monthly payments for the new car will increase. And, the longer the loan, the longer it will take to reach positive equity in the vehicle.
When you have a defective lemon vehicle, negative equity can put you between a rock and hard place. You may be concerned for your safety because if the defects, but owe too much money on the loan to be able to trade the defective lemon vehicle in.
Do you have a defective lemon vehicle that the dealer cannot fix and you cannot get rid of on trade? Feel free to call Burdge Law Office on our Toll Free Hotline, 1.888.331.6422, to see if we can help you out of your "lemon" vehicle.
Helping Consumers Get Rid of Lemons, 13 Years Running