The true cost
Negative Equity Car Finance Calculator
Find out if you're in negative equity on your car finance, and by how much.
Shortfall
£1,500
Settlement figure
£10,000
You're in negative equity
- Car value
- £8,500
- Less settlement
- −£10,000
Negative equity means the car is worth less than you owe. You can settle, sell with the shortfall covered, or wait until you're back in positive equity.
How we work this out
Equity = the car's market or part-exchange value − your settlement figure. A negative result is negative equity (a shortfall); a positive result is equity you can use.
Full method: how we calculate.
Negative equity is when your car is worth less than the amount you still owe on it. This calculator works out your position from the car's value and your settlement figure, and shows the shortfall if there is one.
What is negative equity on car finance?
Negative equity means you owe more on your car finance than the car is worth. If you sold the car today, the price wouldn't cover the settlement figure.
It's common in the early years of a PCP or HP deal, when the car depreciates faster than you pay down the finance.
Am I in negative equity?
You're in negative equity if your settlement figure is higher than the car's value. Enter both above to see the shortfall.
Worked example
Why it happens (PCP and HP)
Negative equity happens because cars lose value fastest early on, while your finance balance falls more slowly.
A small deposit and a long term make it more likely. It usually corrects itself later in the deal as the balance drops below the car's value.
How to get out of negative equity
You can wait it out, settle the difference, or roll it into a new deal — though rolling it over adds to your next debt.
- Wait: keep paying until you're back in positive equity.
- Settle the shortfall: pay the gap to clear the finance — see the settlement calculator.
- Sell or part-exchange and cover the difference — see selling on finance.
- Avoid rolling the negative equity into a new agreement unless you've weighed the cost.
Frequently asked
What is negative equity on car finance?
Am I in negative equity?
How do you get out of negative equity?
Can you part-exchange a car in negative equity?
Work out your next step
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