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Car sales with a trade-in with negative equity rose from 14.9% to 17.4% in one year.
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Having negative equity means having a car debt that’s more than the value of the car itself.
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The rate of severely delinquent car loan payments has not been this high since 2009.
Like a lot of other things in the US, car loans are getting more expensive. So much so, that some drivers have debt on their cars that far exceeds the value of the car itself.
When that happens, the car owner has what’s called negative equity, or, in other words, they’re upside down on the loan. The number of Americans that are upside down on their car loans is increasing.
Experts at Edmunds estimate that the number of vehicles sales with a trade-in with negative equity — you sell a dealer a used car, and its price gets taken off the new car I’m buying — has increased from 14.9% in 2021 to 17.4% in 2022. Additionally, the amount owed on upside down car loans has increased from an average of $4,141 in 2021 to an average of $ 5,341 in 2022.