Tag

Negative Equity

All articles tagged with #negative equity

personal-finance9 days ago•7 min saved

Longer Loans and Rising Prices Trap Buyers in Deepening Car Debt

U.S. car buyers face a growing trap of negative equity as rising vehicle prices and extended loan terms outpace depreciation. While average new car prices have climbed 31% since 2019, loan terms have lengthened to an average of 70 months, with a record 25% of buyers choosing 84-month loans. This mismatch means many drivers trade in vehicles before paying off their loans, rolling unpaid balances into new financing. Experts warn this creates a cycle of 'permanent car debt,' where monthly payments remain manageable but total interest costs soar, potentially preventing buyers from ever owning a vehicle outright.

via cnbc.com|

#auto-loans #car-prices #consumer-debt

business2 months ago•5 min saved

Record-high negative equity drives bigger loans in 2026 car market

Edmunds reports a record $6,884 average negative equity on traded-in cars in Q2 2026 as buyers roll remaining loan balances into new auto loans, with new-car prices near $50,000 and about 30% underwater. The top models with the highest negative equity are the Chevrolet Silverado 1500, Ford F-150, and Ram 1500, and longer loan terms amid higher interest rates are boosting total interest paid as buyers carry over debt into newer vehicles.

via USA Today|

#business #edmunds #f-150

business5 months ago•3 min saved

Capital One's Auto Lending Bet: Longer Loans, Steady Payments

Capital One Auto President Sanjiv Yajnik says rising auto debt and high used-car prices aren’t worsening affordability, noting the payment-to-income ratio has stayed around 10% since 2019 and most buyers finance under 15%. To keep monthly payments manageable, many are taking 72–84 month loans, a trend that can slow equity buildup and raise the risk of negative equity, though consumers still rely on cars for work and daily needs.

via CNBC|

#auto-lending #business #consumer-debt

us-news6 months ago•132 min saved

Record-High Auto Debt Follows Buyers into New Car Loans

A CNBC report citing J.D. Power and Edmunds shows a record level of underwater car debt, with 30.5% of trade-ins worth less than the loan, average negative equity $7,214 (Q4 2025), and 27% owing $10,000+. When financed into a new loan, the typical monthly payment jumps to about $916, while new-car prices rose to about $49,353 in February, up 30% since 2020.

via The Daily Beast|

#automotive-industry #debt #economy

business7 months ago•5 min saved

Record Auto Debt Pushes Buyers Underwater as Negative-Equity Reaches All-Time High

Edmunds data shows U.S. buyers are drowning in negative equity on new-car trades: Q4 2025 averaged $7,214 underwater, with 29.3% of trade-ins underwater—an all-time record. The piece argues dealers’ use of “creative” financing and consumer demand for larger, feature-rich vehicles help drive the problem, a trend the industry is finally acknowledging as affordability becomes unsustainable. A personal anecdote about financing a $40k truck with a $25k value and poor credit highlights how predatory-feeling practices can be, and the story notes that EV buyers have also faced large underwater loans. The author suggests buyers lower expectations and spending, while automakers and dealers must prioritize real affordability to curb rising debt.

via InsideEVs|

#affordability #auto-financing #business

business8 months ago•3 min saved

Car Trade-Ins Leave Buyers Underwater, Owing Thousands

Edmunds data for Q4 2025 show 29.3% of trade-ins were underwater — nearly a record high — with the average underwater balance at $7,214 and more than a quarter carrying over $10,000 in negative equity. Those rolling it into new loans faced an average monthly payment of $916, with about 40.7% choosing 84‑month terms. The trend traces to pandemic-era pricing and limited leasing options; relief may come from MSRP-friendly deals, but many cars will remain underwater until depreciation slows enough for the balance to fall below value.

via Jalopnik|

#auto-loans #business #edmunds

business1 year ago•1 min saved

Rising Auto Debt Leaves More Car Owners Underwater

A growing number of U.S. car owners are underwater on their auto loans, with over 25% of trade-ins in negative equity, leading to higher monthly payments and potential debt cycles, driven by high car prices and loan rates, according to Edmunds.

via Axios|

#auto-debt #business #car-prices

business1 year ago•4 min saved

Receptionist's Quick Action Foils Car Sale

A car salesman warns against other dealership employees interfering with ongoing sales, highlighting a case where a receptionist's attempt to lower a customer's payment led to the customer leaving, illustrating the importance of respecting sales boundaries and the impact of negative equity and inflation on car buying decisions.

via Motor1.com|

#business #car-sales #customer-service

financeeconomy2 years ago•2 min saved

"Rising Negative Equity: The Growing Challenge of Underwater Car Loans"

As used car prices continue to fall, more people are finding themselves underwater on their car loans, with the value of their trade-ins not covering the remaining debt. This trend is particularly affecting newer vehicles, as the depreciation is hitting them the hardest. While there are significant discounts available for luxury and large mainstream vehicles, those seeking more affordable transportation may struggle to find similar savings due to restricted supply. Overall, the current market conditions are making it challenging for many consumers to find good deals on both new and used cars.

via Jalopnik|

#car-loans #depreciation #financeeconomy

finance3 years ago•3 min saved

The Challenges of Obtaining Car Loans in a Cautious Lending Market

While more cars are becoming available and prices are stabilizing, potential buyers are facing challenges in obtaining auto loans. The rejection rate for auto loans has risen to its highest level since 2013, with lenders becoming cautious due to borrowers' struggles with inflation, interest rate surges, and increasing debt. The market for auto financing is experiencing a rise in delinquency and default rates, leading to concerns about negative equity. Many lenders have scaled back or eliminated auto lending, further limiting options for consumers and potentially increasing interest rates. To navigate these challenges, consumers are advised to consider alternative financing options and be mindful of the overall cost of the loan, including the APR.

via USA TODAY|

#auto-loans #borrowing-challenges #car-prices

finance3 years ago•6 min saved

"Negative Equity Storm: How to Protect Your Used Car Investment"

Drivers who took on auto loans at high interest rates and paid sky-high prices for cars could face some headaches down the road as car values pull back in an economic slowdown. Negative equity — or owing more on your car than it's worth — is building, particularly in used cars bought by subprime borrowers. The auto industry pays close attention to loan-to-value ratios — the difference between the loan amount and the market value of the car. The higher the number, the more vulnerable the consumer. As vehicle values have declined in recent quarters, used car loan-to-value ratios at origination have trended upward.

via Detroit Free Press|

#auto-loans #finance #loan-to-value-ratio