Finance calculator
Negative Equity Car Finance Calculator
Compare a lender settlement figure with estimated vehicle value to understand your equity position.
Use this calculator
What your result means
Equity is the difference between the estimated vehicle value and the lender settlement figure. A vehicle worth less than the settlement figure has negative equity; a higher value has positive equity.
Use an actual lender settlement figure where possible. Remaining instalments are not necessarily the same as a settlement figure, and vehicle value remains an estimate until a price is agreed.
Canonical worked example
Using an £18,000 lender settlement figure and a £15,500 estimated vehicle value:
- Settlement figure
- £18,000.00
- Estimated vehicle value
- £15,500.00
- Equity position
- £2,500.00 negative equity
The estimated value is £2,500 below the settlement figure, so the result is expressed as negative equity rather than a negative currency headline.
Formula
Vehicle-value sensitivity at an illustrative £18,000 settlement figure
| Estimated vehicle value | Equity position |
|---|---|
| £14,000.00 | £4,000.00 negative |
| £15,000.00 | £3,000.00 negative |
| £16,000.00 | £2,000.00 negative |
| £17,000.00 | £1,000.00 negative |
| £18,000.00 | Neutral |
| £19,000.00 | £1,000.00 positive |
Why the settlement figure matters
The settlement figure is the amount the lender says is required to settle the finance at that time. It can differ from simply adding the remaining instalments because agreement mechanics and timing can matter.
Compare that figure with a realistic dealer, trade-in or private-sale valuation. The final value is not known until a buyer agrees a price.
Using negative equity carefully
Negative equity means the estimated vehicle value is below the settlement figure. Rolling that shortfall into another finance agreement can increase the amount borrowed and the cost of the next agreement.
This page is informational only. It does not calculate refinancing, assume a lender will roll a balance into new finance, or recommend a course of action.
Practical guidance
Ask the lender for a current settlement figure and gather more than one realistic vehicle valuation before making a decision. Recheck both figures if time passes because they can change.
Consider the full cost of any next agreement, not only its monthly payment. If you are concerned about debt or affordability, seek independent regulated advice.
Assumptions and limitations
- The entered settlement figure and vehicle value are current and comparable.
- The calculation does not include selling costs, dealer offers, fees, arrears, future depreciation or a refinancing product.
- It is informational only, not lending advice, a settlement quotation or a finance offer.
Helpful questions
What is negative equity?
It means the estimated vehicle value is lower than the lender settlement figure.
Should I use remaining monthly payments as the settlement figure?
No. Ask the lender for an actual settlement figure because it may differ from the sum of remaining instalments.
Is a vehicle valuation guaranteed?
No. A valuation is an estimate until a dealer, trade-in provider or private buyer agrees a price.
Can negative equity be added to new finance?
It can increase borrowing if a lender permits it, but this calculator does not assume that will be available or appropriate.
How can depreciation affect my equity position?
A lower vehicle value can worsen equity. Use the Car Depreciation Calculator to explore value change separately.
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