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When you look at the housing sector, it is called “negative equity. ” When you look at the automotive industry it’s called being “upside down. ” Both in situations, this means the thing that is same You owe more income on a secured item compared to the asset it self will probably be worth.
When you’re upside down on car finance, you are able to end in big difficulty because a vehicle does not develop in value like a home usually does. It is possible to record a motor vehicle as a valuable asset on your own stability sheet if you prefer, however in truth, it is maybe not a secured item or an investment.
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