Carry-Over Equity
Positive equity from a paid-down trade applied as the down payment on the next vehicle.
Carry-over equity is the dollar value left over after your current loan pay-off is settled from the trade-in value — the surplus carries forward to the next deal as a down payment or cap cost reduction. Example: trade worth $24,000, loan pay-off $18,000 = $6,000 carry-over equity that the dealer applies as your down payment on the new car, no cash out of pocket required. Carry-over equity is the cleanest way to fund a new purchase and the financial mirror image of negative equity. Always verify the dealer's carry-over math against your written pay-off letter and a written Carmax/Carvana offer — dealers occasionally understate trade value or overstate pay-off to capture the gap.