Vehicle EconomicsMaximum Negative Equity for Target Payment
Rolling negative equity into a new loan raises your payment, so there's a ceiling to how much you can carry over. This finds that ceiling for your own budget.
Why this comes up
Before you even know your actual trade-in shortfall, it helps to know the ceiling: how much old debt could this new deal absorb before your target payment breaks? This is a budget ceiling, not the size of your actual gap, once you know both numbers you can see immediately whether your real situation fits.
How we calculated this
We solve the maximum loan principal your target payment supports at this APR and term, then subtract what the deal costs before any rollover (price minus down payment minus trade credit). Whatever headroom remains is the maximum negative equity this deal can absorb.
Worked example, using this page's own defaults ($28,000 price, $2,000 down, 6% APR, 60 months, $550 target payment): the maximum rollover capacity comes out well above a modest gap, run the calculator above with your own numbers and actual gap to check where you stand.
What this means
- Your target payment may permit less rollover than your actual shortfall, even before any other purchase choices change, that's the ceiling this engine solves for.
- If your actual gap exceeds this ceiling, Down Payment Needed to Eliminate Negative Equity or Trade Now vs Wait 6 Months are the next real options.
- If capacity remains after your actual gap, Negative Equity Rollover Payment shows exactly what rolling that specific gap does to your payment and interest.
Limitations
This is a planning model, not a lender's approval decision, and assumes the stated APR and term are actually available at this loan size. See Methodology.
Methodology
This engine is built on Vehicle Economics' fixed-rate amortization model: the standard loan-payment formula run out as a full month-by-month schedule. See Methodology for the full detail.