You may heard the term “upside down car loan” and wondered what the heck that entailed. Well luckily, we’re here to help you.
Pretty much this is a situation where you owe more on your auto loan than the car is actually worth. It’s tricky to be in this position because if you decide to sell your car, you probably won’t make enough money to pay off the remainder of the loan. This also means you won’t be able to easily and efficiently purchase another new car without plunging deeper into debt.
This often happens to people who don’t take into account that their car loses value as soon as they drive off with it. It’s important to keep this and other factors in mind when setting up your finances for paying off an auto loan so you don’t find yourself upside down.
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