What does it mean to be upside down in a car loan in Bancroft? This is the term lenders and car sales people use to mean that you owe more on the car than the car is worth. This predicament is becoming more common because the last number of years has seen sellers offering low interest rates and incentives to purchase new vehicles off the lot. The current economic climate has also made things more difficult for buyers, making upside down car loans in Peterborough more common.
Whatever the reason you may be wondering what your options are if you owe more on your vehicle than the vehicle is worth.
The easiest option, so long as you can afford your car payments, is to keep the car until the loan is paid down. At some point the amount left on the loan will be lower than the value of the car. Then the car will be easier to trade in for a new vehicle.
If you can’t make the payments because they are too high, you may be able to purchase a new car and trade in the old. Even if you owe more than the trade-in value, some dealers with add the amount you owe on the old car to the new loan and finance the total for a longer period. This can have the advantage of lowering your payments so that they are more manageable. However, in reality you are making payments on two cars—the one that you traded in as well as the new one.
If, however, you are able to find a new car that has an incentive offer that is the amount you owe over the value of your current vehicle then you can use the incentive to cover what you owe. This can be less risky than rolling over the debt into a new can loan, but vehicles with incentives can depreciate quickly which could leave you in the same predicament you are now, upside down in a car loan in Pembrooke yet again.