Why You Shouldn’t Roll Over Your Car Loan » Wiki Convenient Bank Rates

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Auto loan rollover is the process of adding the negative capital, or remaining auto loan balance, of one auto loan to the next.if you are trade with your car However, if you still have a current balance, the dealer may offer to roll your previous balance back onto your new vehicle. This is not a good idea as there is a risk that upside down If you have a loan for a long period of time, we recommend that you consider alternatives first.

Why is it bad to roll over a car loan?

Carrying forward a car loan increases the negative equity in the vehicle, making it harder to sell or trade, and more likely to turn the loan upside down.

By carrying forward your current loan, you increase the balance you owe. As this balance grows, you’re more likely to take out a loan for more than the car’s actual value. This is also known as turning the loan upside down. In addition to this, you will be paying for more than just a new car, which can increase your monthly expenses.

Upside down loans are not always a problem. Especially if you plan to keep the car for a long time. However, if you go to sell a new vehicle and stay in the water, you will have to pay the difference.

Think of it this way. Your car loses value the moment you leave the dealer’s premises. depreciationSo adding another loan to an existing depreciating vehicle exacerbates the problem. By carrying forward your current loan, you will cover both the remaining amount of your original loan and the value of your new car.

Before agreeing to roll over your car loan, it’s wise to consider other options first. Here are some alternatives to keep your financial health in a more positive state.

  • First, pay off your current loan. Your best option is to pay off your current loan before signing off on your new car. This keeps costs from stacking up on top of each other and reduces the risk of being upside down.there are many ways pay off debt quicklyfavorite refinancing Or remove unnecessary addons.
  • buy a used car. If you need to buy another vehicle soon, please consider buy second handRepurposing a loan onto a previous loan is risky, but you’ll probably be able to take out a loan for less money, thus reducing your building debt.
  • Sell ​​your car privately. If you let go of your current car, sell privately Rather than trade it in at the dealer.You can probably make more money and get more things this way put to the next car.

As you fund your future vehicle, keep these tips in mind.

1. buy a cheap car

To avoid paying off the car more than necessary, car loan calculator Find out how much you can afford and check your Bankrate options before embarking on a vehicle purchase. good value vehicle.

2. Understand Negative Equity

Negative capital is when you owe more than your car is worth.make use of calculator To understand what would happen to your car payments if you rolled your stake back into your next car loan.

3. Leasing, not buying

If you don’t like the car enough to keep driving for more than a few years, Consider leasing. Usually a lease Lower monthly costs Than buy a comparable car. However, there are mileage restrictions and fees that must be paid at the end of the lease.


Your need for a new car can be unpredictable, but if possible, it’s best to avoid carrying your current loan over to your new car and wait to buy your next car. It’s an economic risk, it can lead to more debt, and it can affect your finances beyond your car loan.

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