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
Part 3 – Sell The Car With Negative Equity – Option A – Pay Off The Balance
Let's assume that a car has an actual value of $12,000 but the loan balance is $18,000. This means that the car has negative equity of $6,000.
This is quite the lovely situation, but it is possible to make the car leave.
If one wants to sell the car, then the negative equity must be covered in order to provide a clear title to the purchaser. The fastest way to clear out the negative equity is to find a purchaser who is willing to pay $12,000 for the car and use $6,000 from savings to clear up the negative equity. This is by far the fastest and easiest way to clear up the negative equity situation – IF you have $6,000 in savings!
Earn the Difference
If one does not have the money to cover the negative equity, then another way to accomplish the exact same thing is to earn additional income. Work overtime or acquire a second job to earn enough to cover the negative equity.
This is definitely not a fun answer, but I do not like negative equity situations either. The tough part about this option is the fact that it takes additional time and it is possible that the negative equity will increase because the car will continue to go down in value.
Sell Something Else
If one has an item that they no longer need, want, or use that has value, it can be sold to cover some of the negative equity.
I prefer Option A the most because it eliminates the entire debt and frees up the entire car payment to use for additional debt pay-off, savings, giving, and investing.
In the next part of this series, we will continue to discuss ways to sell the car even with negative equity.
Read the entire "Sell Car With Negative Equity" series HERE.
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