Negative equity happens when the value of an asset, like a car or home, is less than the remaining balance on the loan used to buy it. This is also known as being “underwater” or “upside down” on a ... That does not mean the vehicles are submerged.

Understanding the Context

In a sense, the drivers are. More than one in four trade-ins had negative equity in the third quarter of 2025, Edmunds reports. In auto industry parlance ... Wall Street Journal: How to Trade In a Car With Negative Equity You might be able to trade in a car with negative equity, but it doesn’t always make sense Written By Written by Staff Loans Writer, Buy Side Emily Sherman is a staff loans writer for Buy Side, ...

Key Insights

AOL: What is Negative Equity on a Car and How to Fix It If your car's current value is less than the amount you owe, you have negative equity. This is also known as being upside down on your auto loan. When the time comes to purchase a new car, having ... What is Negative Equity on a Car and How to Fix It NEGATIVE definition: expressing or containing negation or denial. See examples of negative used in a sentence.

Final Thoughts

In order to understand what negative equity is, it’s helpful to know what home equity is. Home equity is the difference between your home’s market value versus the outstanding balance you have left to ... Negative equity, or being upside-down on your auto loan, means owing more on your vehicle than its current value. Some dealers might accept trade-ins with negative equity if you pay off what you owe ...