What is an Upside Down Car Loan?

Financing a vehicle with an auto loan doesn’t mean you have to drive that car for the duration of the loan. If you decide that the vehicle you’re financing isn’t right for you and wish to trade it in for something else, that possibility is always available, but it’s important to make sure that you don’t end up with an upside down car loan. The experts at Indy Car Financing can help you with your loan situation, no matter what your budget is.

Understanding What an Upside Down Car Loan Is

Before you trade in your vehicle, it’s important to know what it means to go upside down on a car loan. A more technical term for this is negative equity. Let’s say you need to make $14,000 in car payments on a vehicle that’s worth about $11,000. If you were to trade in your vehicle for the $11,000 and use that money to pay off the current loan, you are still left with $3,000 of debt, plus the cost of your next automotive investment. Your monthly payments will be that much higher because now you’re paying off the rest of one car, as well as the price of another.

What Are Your Options When Purchasing Your Next Car?

If you find yourself in a situation where you have taken on an upside down car loan, you can still effectively purchase another car without worrying about going over budget. Here is a brief selection of options:

• You can rollover the existing debt to your next car loan. Chances are that you’ll be able to drive off the lot in a new car with a comparable monthly payment.
• Invest in a new car with an incentive that covers your existing debt.
• Keep your current vehicle so that you can catch up to its value. You might have to wait a some time before investing in a new car, but at least you won’t go further into debt.

Indy Car Financing Has Your Upside Down Car Loan Solution

No matter what your credit history or financial situation is, Indy Car Financing is here to help. If you think you might have an upside down car loan and you’re looking for a better financing solution, our experts can assess your situation and provide viable options. You can contact us at 855-468-6215 if you have any questions.