Trade-in negative equity: reconcile the closing figures

An old payoff, a trade offer and the replacement price must reconcile to the new funding amount.

Find the old payoff and trade offer

They are different numbers. A payoff of 18,000 against a 15,000 trade offer creates a 3,000 shortfall before the replacement car is considered. A promise to handle the old loan does not show who ultimately funds that shortfall.

Write the funding identity

Add replacement price, modeled tax, fees, add-ons and the old payoff. Subtract the trade value and new cash down. A positive result is financing needed; a negative result is modeled cash surplus.

Keep tax assumptions explicit

The tool can tax full vehicle price or reduce that base by trade value. Those are illustrative conventions, not a location lookup. For a deal that uses other rules, enter zero for the tax rate and include the quoted tax once in the fees field.

Read what the new payment contains

The comparison removes only the old negative-equity shortfall while keeping the other terms fixed. The incremental payment and interest isolate that scenario difference; they do not estimate a lender’s approval limit.

Build a closing reconciliation. See CFPB on unpaid trade-in loans.