How do you sell a car when you owe more than it's worth?
When a car's trade-in offer falls thousands of dollars short of the remaining loan balance, owners are left stuck with a massive financial gap. Because lenders and dealerships require the difference to be paid in cash or through a personal loan upfront, people get trapped making monthly payments on a car worth a fraction of what they owe.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Selling the car privately on Facebook Marketplace to get a higher price than dealer or instant buyer trade-in offers
- 2Using personal savings or taking out a personal loan to cover the remaining loan balance gap
- 3Trading in the vehicle for a cheaper option
- 4Letting the car go through a voluntary repossession
- 5Trading the car in for a new one and rolling over or paying off the negative equity
- 6Keeping the car, paying off the loan as aggressively as possible, and cutting other expenses
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“Your friend will either need to save a few thousand or get a personal loan to cover the difference.”source ↗
“We're trying to find some way for him to sell his car and Carvana seems like the best bet given we know very little surrounding cars and such.”source ↗
“They offered to pay off the loan by 20,000 and hes will owe 8,000 something.”source ↗
“I have a 2018 nissan sentra sv with about 130,000 miles.”source ↗
“The car is worth basically nothing more than $600 according to nissan, chevrolet, carvana, etc.”source ↗
“The problem is my credit is poor about a 559 and the dealerships want $5k down or for me to pay off my car.”source ↗
“Now i’m just upside down making car payments for the next 4 years. I’m only 20 years old and feel like I failed and ruined my credit already.”source ↗
Where this came up
People with this problem also raised
- 4What to do about car loan debt after a totaled car without full coverage
- 9How to get out of a high interest car loan
- 10Should I sell my paid off car to invest the cash?
- 2How to get out of an expensive car lease you can't afford
- 5How to stop car repossession after missing loan payments
- 3Tax and financial implications of paying off a parent's debt