US car shoppers face rising negative equity on auto loans

11 articles · Updated · Newsday · Apr 24

At the end of Q1 2026, 30% of US drivers trading in vehicles owed an average of $7,183 more than their car’s value, according to Edmunds.
Experts attribute this trend to pandemic-era purchases, higher new car prices near $50,000, and increased leasing. Financial institutions report more consumers seeking leases to avoid negative equity risks.
Analysts advise buyers to consider pre-owned vehicles, shorter loan terms, and pre-approval from credit unions. Negative equity can be mitigated with gap insurance, refinancing, and careful budgeting to prevent long-term financial strain.

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