Vehicle Economics

Negative Equity Rollover Payment

See exactly how much rolling your old loan shortfall into a new loan raises the payment and interest.

Why this comes up

When a trade is underwater, dealers routinely roll the gap into the new loan without walking through what that actually costs, it just shows up as a somewhat higher payment on the sheet. This engine isolates exactly how much of your new payment and new interest is attributable to that old shortfall, not the new vehicle itself.

How we calculated this

We compute the rollover amount as your old loan payoff minus your trade offer (floored at zero). Then we amortize two loans at the same price, down payment, APR, and term: one without that rollover added to principal, one with it, and compare the payment and total interest between them.

Worked example, using this page's own defaults ($30,000 price, $8,000 offer, $12,000 payoff, $2,000 down, 6% APR, 60 months): the rollover amount is $4,000, and financing it raises both the monthly payment and the total interest paid. Run the calculator above to check the exact impact for your own numbers.

What this means

  • Rolling debt raises both principal and interest, not just the price tag, the interest attributable to the rollover compounds for the full term of the new loan.
  • If the added payment is more than your budget can absorb, Down Payment Needed to Eliminate Negative Equity solves the cash needed to avoid rolling the gap forward at all.
  • If cash isn't available now, Trade Now vs Wait 6 Months compares rolling the gap today against waiting for it to shrink.

Limitations

This is a planning model, not a lender's payoff quote, and does not assume any tax treatment or dealer fee beyond what you enter in the price. 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.

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