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state of equity comes from when your cars value does not exceed the loan balance of the car youre trading in so if you owe twenty thousand dollars on a car and your car is worth fifteen thousand dollars and you want that new car and they get it to fit into budget now youre rolling that 5000 over to the new car loan so thats bad thats horrible thing to do and then if you decide to do it again and again and again now you have so much negative equity fifteen twenty thirty thousand dollars of negative equity which Ive seen before and thats horrible the way to get out of negative equity is one keep your car as long as possible and pay that mortgage or that loan down of your car until its nothing thats the only way to get out of a negative equity theres no magic wand but how to stay out of negative equity is to not trade your vehicle until you have paid eighty percent of your original balance off so if youve borrowed ten thousand dollars on a car uh dont trade your car until you