For example, if the cost to the dealer is $10,000 but the credit for your car is $7,000 then the negative equity, in this case $3,000, would be rolled into your new purchase or lease agreement. However, if the cost is lower, then that difference is deducted and treated as a down payment.

My only other advice, and keep in mind this is probably a long shot, but you can see if a dealer can work with you on trading into a lease. For example, say the trade-in value of your car is $4,000, you have $6,000 left on the loan and you want to purchase a $15,000 car.

A lease where you must buy the vehicle at the end of the lease. Here at Auto Credit Express, we recommend that you never roll over negative equity into a new car loan unless you have the cash to cover the difference out of pocket.If you have bad credit, it is even more important that you follow that advice. However, that really only works when you are a couple of grand under water. This is known as an End of Lease Payment.
Tim is correct that I once suggested rolling negative equity into a lease to help break the cycle. It’s not a common type of lease but they do exist. Equity Lease or Open End Lease.


And be realistic: you aren’t likely to be able to do this again. He rolled $10,000 in negative equity from his previous vehicle into this lease, leaving him with a high monthly payment relative to the type of vehicle he leased. Basically you'll still rolling over a shit ton of negative equity but hopefully will get a less expensive vehicle and the lease payment will be less. In an open-ended lease there sometimes is an amount that the lessee will pay at the end of the lease that covers the difference between the vehicle’s residual value and the actual market value. Car owners looking to trade in a vehicle for a new one may be given the option of rolling over existing debt into a new car loan. If you are considering this strategy, try to find a vehicle with monthly lease payments you can afford, even if it’s not your preferred make and model. If you do this, be sure to definitely cancel any warranties or GAP coverage you have on the jeep. The Dangers of Rolling Over Negative Equity and How to Combat It.


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