What It Means To Be Upside Down On A Trade-In
“Upside down” might be a term you’ve heard before trading-in a vehicle, but a lot of auto buyers only have a foggy understanding of what it means. At Middletown Honda we want all of our customers to know exactly what they’re getting into, and our friendly sales staff is always happy to explain things. So, here is a quick explanation of what being upside down means.
Upside Down Is Not Exactly What You Want To Hear
If you end up in a situation where a dealer tells you that you’re upside down, don’t simply proceed as normal and the trade anyway — this can be particularly hard on your wallet. Being upside down means that you owe more on the car than the car is worth due to depreciation. Some cars depreciate faster than others and can put you in a position where you might own $10,000 on a car worth only $8,000. If you trade-in your car at that point you would actually owe $2,000 more than the price of the new car you’re trading for because you need to pay off the rest of the current vehicle as well.
There isn’t any magic formula for getting out of an upside down situation, other than simply waiting to trade until the value of your car is greater than what you owe. If you need to trade-in your car when you’re upside down maybe it’s time to reevaluate your financial situation — trading-in a car with negative equity makes driving more expensive long term.
Visit Middletown Honda Today To Find Your Next Used Car
Our sales staff at Middletown Honda wants you to be an educated consumer. We think it’s better for everyone in the long run to know the ins-and-outs of buying and driving a car. Come visit us today and check out our used vehicle inventory to find your next vehicle now.