FinancialWhy people owe more than their car is worthA short readOwing more than it is worthPeople are often surprised to find that selling their car would not clear the loan on it.It is not unusual, and it is not bad luck. It is arithmetic.SourcesVehicle depreciation curves: steepest in the first year or two and flattening thereafterAmortisation: early payments on an instalment loan are weighted toward interest, so the principal falls slowly at firstNegative equity and gap exposure, including that an insurer settles a total loss at the vehicle's value rather than the outstanding balanceBackNext