You and I have both been there.  You go to the car dealership to trade in your car and they offer you less than you expected for you trade.  On top of that, you find out you have much more negative equity in your trade than you thought was even possible.  Worse yet, you suddenly realize you’re going to have to carry that negative balance on the trade into your next vehicle.  And that means you’ll be driving one car off the car lot, but you’ll actually be paying for two cars!

Why All This Negative Equity?

You’re not alone.  In fact, over 50% of us trade in a vehicle with negative equity.  And more than half of us trade in our vehicles at around the three-year point.

Why all this negative equity?  For several reasons, many of which we’ll spend a bit of time discussing. 

High Interest Rates and Payments

Business Insider published an article on March 17, 2019 that contained some interesting numbers from Experian:  interest rates for autos hit a decade high and monthly payments are also at new highs ($545 for new autos and $387 for used autos).  Loan term (the number of months of the loan) is also getting longer. 

Vehicle Depreciation

And on top of all of that bad news, autos depreciate like a rock!  Fox Business recently published an article with some specific depreciation examples (all 2019 vehicles and based on depreciation after five years):  F-150 Regular Cab will depreciate 41.44%, Jeep Wrangler will depreciate 31.23%, Toyota Camry will depreciate 45.59%, Lexus RX 350 will depreciate 50.37%…you get the idea.

How to Beat Your Negative Equity

Well, today I’m going to show you a super easy way to reduce that amount of negative equity in your trade vehicle.  Just enroll today in a bi-weekly payment plan.

Numbers First, Please

Here are some numbers for a fairly average loan:

 

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*Net Service Fee $399 and ACH fees.

Savings at the Mid-Point of Your Loan

At the three-year point in that loan, the bi-weekly payment plan has built for you $1,395 worth of equity acceleration. That’s huge! Remember, a lot of people trade in their auto at about the three-year point. And those people participating in the bi-weekly payment program are $1,395 ahead of the game!

Savings When You Trade Your Vehicle In

And if you trade your vehicle in at the end of six years (loan term is six years), you will have built $2,273 of equity into that trade.  That’s a lot of money you can use to offset the cost of your next vehicle.

The Secret Sauce:  Our Bi-Weekly Payment Plan

Here’s how the bi-weekly payment plan helps put your hard-earned money to work for you.  Each payment puts an extra amount of money straight towards the principle of your loan.  That’s the money you owe the bank. In essence, you’re reducing your loan payoff with every single payment.  It’s just simple math from there: smaller payoff means less negative equity.  Another win for you and the bi-weekly payment plan!

Enroll and Start Saving

Are you curious to see how much you can save on your specific loan?  Click here and find out!

Conclusion

Take control of your finances and reduce your negative equity with a bi-weekly payment plan.  Stop being the victim and treat this like the fight for your financial life that this is.  Arm yourself with a bi-weekly payment plan and win this war against negative equity.  Reach out to Loan Interest Byter today and enroll your loan in a bi-weekly payment plan.  We’re here to help and look forward to hearing from you!