Negative Equity
Negative equity means you owe more on your car finance than the car is currently worth — common early in PCP and HP deals because new cars depreciate fastest in year one. It bites when you try to sell or part-exchange early: you must clear the shortfall out of pocket, or roll it into your next deal (making that more expensive). Bigger deposits and shorter terms are the best defences.
Example
Owing £18,000 on a car now worth £15,000 leaves £3,000 of negative equity to clear before you can change cars.