Negative Equity Calculator
Negative equity means your car is worth less than the outstanding finance. Enter your car's current market value and the amount you still owe to see exactly where you stand and what your options are.
Frequently asked questions
What is negative equity on a car?
Negative equity occurs when the amount you owe on your car finance is more than the car is currently worth. It is common in the first 1–2 years of a finance agreement because cars depreciate faster than the loan balance reduces.
Can I still sell or trade in a car with negative equity?
Yes, but you need to cover the shortfall. If you part-exchange, the dealer typically rolls the negative equity into your new finance deal, increasing the amount you borrow. You can also pay off the shortfall in cash.
How can I avoid negative equity?
Put down a larger deposit (20%+), choose a shorter finance term, or buy a car with strong residual values. Avoid long PCP deals on cars that depreciate quickly. Gap insurance can also protect against negative equity if the car is written off.
What is GAP insurance?
GAP (Guaranteed Asset Protection) insurance pays the difference between your car's market value and the outstanding finance if the car is written off or stolen. It protects you from paying out of pocket for negative equity in a total-loss scenario.
Does negative equity affect my credit score?
Negative equity itself does not appear on your credit report. However, if negative equity leads you to borrow more than you can afford (e.g. rolling it into a new deal), higher monthly payments could strain your finances and potentially lead to missed payments.
These calculations are estimates based on 2026/27 HMRC and DVLA rates. Speak to a lender or qualified financial adviser for a personalised quote.