Definition

If you want to offer the automobile through your finance contract, while the car is really worth not as much as the total amount owed, you’ll need to cover the shortfall.

Negative equity explained

To spell out exactly how negative equity works in detail, let’s just simply take a good example.

Imagine you are taking down car lease on an agreement that is 36-month a new vehicle respected at ?20,000 at mortgage loan of 9.6per cent APR.

Your total amount payable with interest is ?22,963.50, as well as your cost that is monthly is.