I want to trade in my car on a newer model. The wife told me I have negative equity. What does that mean?
It means your wife has been looking at trade-in estimates on your car, probably on the internet, and figured out that your car is probably worth less as a trade-in than the amount you still owe on your car loan. If you bought your car new, it depreciated in resale value quickly in the first year. With today's aggressive vehicle financing (low down payments, extended repayment terms), negative equity is not at all unusual. As the loan balance gets paid down, and the depreciation rate on a vehicle slows, the problem normally resolves itself. It always goes away when you make the last vehicle loan payment, of course.
You can still trade in a vehicle if you're in a negative equity position. However, you'll have to make up the difference one way or another. If you can't pay it in cash when you trade in the older vehicle, the dealer may add the required amount to the deal on the new vehicle. That's an expensive way to resolve the problem, since you'll be paying interest on the extra amount you'll need to finance. This increases the likelihood that you'll get into a deeper negative equity position on the new vehicle.
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It means your wife has been looking at trade-in estimates on your car, probably on the internet, and figured out that your car is probably worth less as a trade-in than the amount you still owe on your car 