Vehicle EconomicsNegative Equity Calculator
Your gap to neutral, and what rolling it into a new loan would cost per month.
Why this comes up
Being underwater on a car loan feels abstract until you see what it actually costs to carry forward: old debt doesn't disappear when you trade in, it gets added to the new loan and financed all over again, at the new deal's rate. This engine puts a real monthly number on that consequence.
How we calculated this
The gap to neutral is payoff minus market value, floored at zero. If you roll that gap into a new loan, we estimate the added monthly payment using the new loan's APR and term.
Worked example, using this page's own defaults ($15,000 value, $20,000 payoff, 6% APR, 60 months): the gap is $5,000, adding roughly$97/month on top of the new vehicle's own payment if rolled in. Run the calculator above with your own numbers.
What this means
- That extra monthly payment is financing debt from a car you no longer own, it's the clearest reason to pay the gap in cash if you can, see Down Payment Needed to Eliminate Negative Equity for the exact figure.
- A longer new loan term lowers this added payment but extends how long you're financing old debt, check the tradeoff before assuming a longer term "fixes" it.
- If cash isn't available now, Trade Now vs Wait 6 Months compares waiting for the gap to shrink against trading today.
Limitations
Market value and payoff are your own figures, not a live valuation or lender quote. See Methodology.
Methodology
This engine combines Vehicle Economics' fixed-rate amortization model (the standard loan-payment formula run out as a full month-by-month schedule) and equity and depreciation projection model (your value and loan payoff projected forward from your own depreciation figure until they cross). See Methodology for the full detail.