There are many reasons to consider MileOne used cars, like big savings and access to a broader range of models within your budget. Hall | MileOne Autogroup is here to help with every stage of the pre-owned vehicle purchasing process, including financing challenges and options. With support from our expert team, you can learn how to deal with negative equity in used models.
What is Negative Equity?
Understanding negative equity helps you address it. Negative equity is often referred to as being “upside down” or “underwater” on a loan and occurs when you owe more on a vehicle than its valuation. To determine if you have negative equity, compare the value of the vehicle to the remaining loan balance. Whatever amount is over the vehicle's value, that’s the amount of negative equity.
How Do I Avoid Negative Equity?
The good news is that you can take steps to avoid negative equity in the future. One of the most effective is to stick to a shorter term length. That means you’ll be able to pay your loan off more quickly, and the money will go toward principal rather than interest. If you’re unsure where to start, consider the 20/4/10 rule, which recommends a term length of no more than four years.
What Do I Do If I Have Negative Equity?
One of the fastest ways to address negative equity is by simply paying more. Make sure the money is going toward the principal, and you’ll quickly owe less on the vehicle than its value. You can also refinance your loan to help pay it off faster.
Vehicle Financing Support at Hall | MileOne Autogroup
Hall | MileOne Autogroup is here for you, no matter what your vehicle financing needs may be. We make it easy to find the right vehicle at the right price, and we’ll help you navigate complex financing needs. Learn more about your equity options today.