Welcome to the latest series – "Sell Car With Negative Equity"
The fact that most cars drop in value by sixty percent in the first four years causes an enormous part of the American population to struggle with huge car payments and an inability to rid themselves of the car without acquiring yet another new car and rolling in the negative equity to the new loan.
It is my hope through this series, that you will be equipped to sell a car that has negative equity.
Part 2 – Determine Your Car's Negative Equity
Equity is determined by the following equation:
Vehicle Actual Value – Vehicle Loan Balance = Equity
If the Equity number is negative, then that means that the vehicle has negative equity.
As you prepare to sell your car, it is very important to know the actual value of the car and the actual amount owed.
I emphasize the word ACTUAL because most people tend to overestimate their car's value and underestimate what they still owe.
How does one determine how much their car is actually worth? Obtain a quote from Kelley Blue Book and Edmunds. You will need to know the year and make of your vehicle including your engine type and mileage. These two sites will provide you a general idea of what used cars like yours are selling for in your area. Recognize that these are average selling prices. That means that cars are selling above and below that number, but this is the price that one can expect to sell the vehicle.
Now that you know the actual value of the vehicle, it is time to determine exactly what is owed. Contact your lender and obtain the actual pay-off balance of the car loan.
Now, use the equity calculation to determine your vehicle's equity. If it is negative, then you have a car that is known as "upside down". It has negative equity. You owe more than it is worth.
In the next part of this series, we will discuss ways to sell the car even with negative equity.
Read the entire "Sell Car With Negative Equity" series HERE.
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