We mentioned in a previous article about how you would be able to trade in your vehicle with negative equity, usually with the intention of then finding a new car for a lower overall cost. But another important aspect of this situation concerns how you would set up an agreement with a dealership that is aware about the fact that your vehicle is in negative equity. Today, we’re spotlighting negative equity car dealers, which will prove crucial to any future finance plans should you be in negative equity yourself.
As the theme of this story suggests, these are car dealers that can work with those that have negative equity. Note the use of the word “can”; very few dealerships will be designed solely to work with those that are in negative equity, but it is also something that not every such company will offer either. Indeed, a lot of car dealerships avoid the subject, either because they cannot take on customers with negative equity or because they simply choose not to. A negative equity car trade or finance plan can be complicated, so it’s an area that some companies will not touch.
Amongst those that do, there are often thresholds in place, limits for negative equity plans depending on just how much you owe. It could be argued that those who have very low negative equity could just pay it off themselves, but not every motorist will have that luxury. Conversely, those with a high negative equity can have alarm bells ringing, because if they’re many thousands short, how can they be trusted to complete a new agreement, especially when they still have a massive loan to pay off? Therefore, car dealers will generally set a limit between around £1,000 and £3,000 for negative equity. The majority of drivers sit somewhere within that region, but those who have negative equity into the mid-four figures might find their dealerships options are limited.
And should you find a dealership that is suitable and willing to help you trade in your car with the intention of setting up a new plan, the ball will be in their court. After all, they are not the ones who have a certain amount of money to pay off before the new plan is green-lit; it will be you, and they obviously know that. This can also unfortunately open the door to struggling motorists being taken advantage of, and being “persuaded” to agree to a plan that sounds good on paper but is unfair in practice, or it has some hidden terms and conditions that can prove detrimental. As a result, you need to make absolutely sure that the car dealership are trustworthy and up-front, as well as having strong customer feedback in the past, otherwise a concerning situation could be made a lot worse.
The good news is that there are many highly respectable car dealers out there that can and will help those with negative equity to progress and end up with their preferred new vehicle via agreements that are fair and feasible.
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