Negative equity car trade-in calculator.

How the estimate works

Equity = trade-in value − payoff. If it is negative, the shortfall (payoff − trade-in value) is added to the new loan: amount financed = price + fees + sales tax − down payment − trade-in value + payoff, which equals price + fees + tax − down + shortfall. Positive equity instead reduces the amount financed. The payment is the standard fixed-rate amortization payment, and “extra interest” is total interest with the shortfall minus total interest without it, at the same APR and term. Loan-to-price is amount financed divided by the vehicle price you entered.

Worked example

Price $30,000, fees $500, 6% tax on price minus trade-in ($1,080), $1,000 down, trade-in offered at $12,000 with a $15,000 payoff, 8% APR for 72 months. Equity is −$3,000. Without the shortfall you would finance $30,580 (payment $536.17). Rolling in the $3,000 means financing $33,580 (payment $588.77, loan-to-price 111.93%), about $52.60 more a month and $787.18 more interest.

Sources and as-of date

Reviewed 2026-09-30. This tool contains no rates, tax tables or fee schedules; every figure is yours. Concepts follow the CFPB: Should I trade in my car if it’s not paid off? (last reviewed Sept 12, 2023) says rolling negative equity into a new loan makes it more expensive, and dealer-arranged vs bank financing (last reviewed Nov 8, 2022) explains that dealer financing can include a rate markup and that pre-approval lets you compare rates. The amortization formula is standard; the tax treatment of trade-ins and rolled-in balances varies by state.

FAQ

What is negative equity on a car?

It means you owe more on the loan than the car is worth as a trade-in. The gap is the shortfall: payoff minus trade-in value.

What happens to negative equity when I trade in?

The dealer pays off your old lender with the trade-in value, and the remaining shortfall is usually added to the new loan. The CFPB notes this makes the new auto loan more expensive.

Is rolled-in negative equity taxed here?

No. This calculator charges sales tax on the vehicle price only (optionally net of trade-in value). Rules differ by state, so confirm with your state revenue department or dealer.

Why is loan-to-price over 100%?

Rolling in a shortfall plus tax and fees means you finance more than the vehicle price. You then owe more than the new car is worth from day one, so the same problem can repeat.

How can I avoid rolling it over?

Options include paying the shortfall in cash, waiting while you pay the loan down, or shopping rates early: the CFPB says getting pre-approved with a bank or credit union lets you compare offers before you visit the dealer.