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If you owe more on your car than it’s worth, you’re upside down on it. This can happen for a couple of reasons. If you buy a brand new car and finance the entire thing, you’ll be upside down on it the minute you drive off the lot due to depreciation. This can be a big problem if you wreck the car. Trouble in that situation can be avoided by buying gap insurance from the get-go.

But trade-ins are the more-frequently-problematic reason that a person becomes upside down on their car. You may have bought a car, traded it in a year or two later, and rolled the remaining balance into the new car loan. Do this once or twice, and you can end up owing a significant amount of money on a car that’s worth comparatively little. Getting out of this situation is a little trickier.

Here’s how to do it:

Find out the value of your car. The value of your car is what a stranger will pay for it. To find this, first go to the Kelley Blue Book site and input your car’s details. Make a note of both the private party value and the dealer trade-in value. Next, check private party listings in your area to see how asking prices there compare to what the Kelley Blue Book said. You can look online, in the newspaper, and in magazines like the Auto Trader for this information. This should give you a general idea of the value of your car.

Find out how much you owe. Call up your lender or check online to get an idea of the total amount that you still owe. (Some places may charge you a fee for a payoff balance, so be aware of that.)

Find out how upside down you are. Subtract the value of your car from the amount you owe. For example, if you owe $22,800 on your car, and it is worth approximately $9400, the difference between the two is $13,400. This is the amount that you are “upside down”.

Make some tough decisions. This is where it gets hard. You need to look at your financial situation carefully. Can you afford to continue making your current payments, on time, and still pay for your other expenses, with something left over for savings?

If the answer is yes, the easiest way to get out from being upside down is simply to hold on to your car until after you pay it off. Resist the urge to buy a new one, no matter how appealing that may seem. Remember that car dealers do NOT have your best interests in mind.

If the answer is no, or you don’t want to wait, you need to make more money so that you can pay more toward the loan, owe less money, or both. An easy way to owe less money is to sell the car to a private party. (Remember, doing trade-ins at a dealer is how you got into this situation in the first place. Private parties usually pay more as well, because they don’t have to make a profit.) But in order to sell the car, you’ll need to come up with the difference. You could do this by taking out an unsecured loan (credit unions are good places to check for those), selling other items, etc.

Once you have the car sold, you can continue to make your old monthly payments toward your new loan until it is paid off, and then to yourself until you’ve saved up the money for a very inexpensive (but mechanically sound) car. It may be inconvenient to be without a car, but millions of people do it anyway. Even in towns without public transportation. They walk, bike, carpool, and get rides from acquaintances. It is possible.

The key is to stop the cycle.

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