Overhaulin'

How can I buy a new car if I owe more than what my car I have now is worth?

I have a 2002 Ford Explorer with about 75,000 miles on it and I owe $9,000 and it is only worth about $3500 trade in value. Can I buy a new car with that much debt owed on it? Are there any incentives or grants that I can apply for to help me buy a new car without taking a $5000 loss on it. I live in Lancaster county PA. Thank you.

Public Comments

1. what is the problem of your ford explorer it is a nice car with just 75000 mi .it will last at least for another 75000 mi.
2. Nope. Find $5500 or ride this out. No free lunches out there.
3. This is probably the most commonly asked question in the auto section of YA. There is no magical way to eliminate negative equity unless you have the cash to pay it off or roll it into the loan for your new car. The problem with the latter is that the credit market is so tight, most lenders will not allow you to roll that much into your new loan. Even if you did, you are just compounding the problem by rolling negative equity into a depreciating asset. Keep your car until you pay it off.