Americans face record $7,214 negative equity on car loans
Updated
Updated · CNBC · May 8
Americans face record $7,214 negative equity on car loans
11 articles · Updated · CNBC · May 8
In the fourth quarter of 2025, about 30% of trade-ins were underwater, Edmunds said, with borrowers rolling debt into new loans facing record average monthly payments of $916.
Higher car prices, interest rates and rapid depreciation leave some buyers owing far more than vehicles are worth, raising approval hurdles and increasing repossession risk when negative equity is refinanced.
The problem also worsens losses if a car is stolen or totaled, making gap insurance important; experts advise keeping cars longer, making larger down payments and avoiding rolled-over debt.
With auto debt rivaling student loans, is the U.S. driving toward a massive market collapse?
How are millions of drivers being trapped into paying nearly double a car's price through compounding debt?
Why are eco-friendly electric cars becoming a financial trap, losing value faster than any other vehicle?