Whhatever you purchase will likely have to be new with rebates/incentives to chip away at that negative equity. All lenders go by book value of the vehicle you want to buy. Say you find a $20000 vehicle, roll the $3500 in, you are financing 23500 not counting taxes and fees. If the book value of the new vehicle is right at selling price you are trying to finance 117% of book value. Lots of folks won't go over 110%. I think NFCU goes 125% also most CU's will. Just something to think about. Also a captive lender for a manufacturer might take a higher LTV rate.
Depending on vehicle price, income, etc., it's possible to just go through the normal process while taking a longer term loan. If, however, your deal requires a down payment, the only way it can happen is if you can get enough incentives to offset the negative equity and down payment requirement. One thing I would do is get multiple trade in offers from other dealers, like CarMax, but don't tell the dealership that you're buying from. Let them do their appraisal and pull out the quotes if it's on the lower end.
@Anonymous wrote:I did see that GMC has a $3300 purchase allowance on 2021 Terrains. But I am not sure if that would help
Yes that will take care of your negative equity. Also GM has special pricing for many employers and occupations. Nurses, teachers, large national employers. Go to GM Supplier discount and see if you qualify. If you do there is usually another $1000 or more off.
That is good. Also remember though a dealer can hold up to two points of interest rate without your knowledge. In otherwise GMF says you are good for 3.9% the dealer can contract you at 5.9%. If in doubt ask them to show you the callback sheet. it will have the rate on there.