I want to trade down my car that I still owe $7,000 on that's worth $5,000. What options do I have?

Asked in San Francisco, CA · April 8, 2016
I am a 22 year old male whos car insurance is so high due to not having my car paid off up top of a car note. I was wondering if I could return the car to something cheaper

Advisor answers

Thanks for your question to NerdWallet. Being upside down in a car payment is a result of paying too much for the car when you initially purchased it, and/or having a very high interest rate on your loan. Unfortunately, the $2k deficiency will have to be paid off. If you trade the car in, the $2k will be added into the price of the new car. It will become a vicious cycle because you will be upside down on the new car as well. Try to get the car refinanced at a lower interest rate.

If the insurance is excessively high, you can c...