Dallas Woman with Newer Toyota Tries to Trade In Her Car for Less Expensive Option. Then the Dealership Steps In

"Don’t be like me."

Toyota Camry

Photo by: Unsplash.com

Nina Hernandez

By: Nina Hernandez

Sep 9, 2025 at 5:00am ET

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A Dallas woman learns an unpleasant lesson after she attempts to trade in her newer Toyota for a less expensive option.

TikTok user Hannah (@hannahhhhhhd) told her dealership horror story in a video posted on Aug. 21. “I went to the dealership today to see if I could get out of my expensive car payment,” she says to start the video. “And something I realized is if you have negative equity within your car, you can’t just switch to a cheaper, more affordable car and think that your car payment will be lower, and they’re just gonna let you do that.”

Hannah now knows this because she learned from the dealership that it’s a bit more complicated than simply switching out cars. “I had this whole plan in my head that I’m going to get a cute Jetta or something,” she says. “I’m happy with that. I could pay it off faster. Moral of the story: Don’t be like me and get yourself into a high car payment that becomes overwhelming.”

Viewers React to the Dealership Reality Check

In the comments section, viewers offered Hannah advice on how to potentially get out of her precarious financial situation.

Much of the advice involved refinancing the loan or finding an electric vehicle with rebates to neutralize the negative equity.

“Refinance through a local credit union or find an EV with tons of rebates to soak up your negative equity and lease it for 24 months,” suggested one viewer. “Any cash down will help a lot on the lease as well.”

A second user agreed. “First, go to Carmax and get your car appraised,” they wrote. “Find a car—preferably an EV. A new one will have $7,500 off, which should eat up a lot of your negative equity or maybe all. Bring that Carmax appraisal to the dealership so they can match it. Second, lease the EV for three years; don’t finance it. Once you are done with that lease, any negative equity is gone.”

It’s important to note that the federal EV tax credit is ending at the end of September. So if Hannah chooses to go that route, she’ll need to move quickly.

A third person offered a different perspective. “Finance guy here,” they wrote. “All of these people saying refinance: Most banks don’t want your negative equity either. Some lenders will give a certain percentage over value like 20% more than their book value. So if your car is valued at $20k, they might lend $24k, but if you owe more, they’ll want you to come out of pocket with the rest. Some banks, depending on credit, will only lend 80% of the value making you have to have positive equity to lessen the risk of the loan. It’s a whole thing.”

Can You Trade In a Car With Negative Equity?

Put simply, negative equity means that you owe more on the car loan than what the car is actually worth. According to RefiJet, it is possible to refinance a car loan with negative equity, but it is more complicated than the usual process.

What do you think?

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The banks reviewing your application are going to be looking at how much more you owe on the loan versus the market value, as well as your credit score and debt-to-income ratio. You can improve your odds of getting approved by working to improve your credit score, making a dent in your negative equity by paying down your current loan, and saving up for a down payment.

Motor1 reached out to Hannah via TikTok comment and direct message for comment.

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