When our car brakes are not working and we had not got them fixed, this might lead to accidents which would injure other people which is a negative externality. Explanation Solved by verified expert Negative externality is the phenomenon where a third party bears the damage caused by our negligence. When the brakes of the car are not working, this would lead to accidents on the road by other drivers who might get distracted by our car and they might have to bear the costs of the repairs and damage. The same goes with pedestrians on the road. This means our negligence is causing others to pay the price or is harming others. This means it is leading to negative externality