Record Number of Americans Facing Upside-Down Car Loans

A growing percentage of U.S. car owners owe more on their loans than their vehicles are worth, marking an all-time high in negative equity.

Edmunds reports that 24.2% of Americans trading in their cars owe more than their vehicles' value, up from 23.9% in the previous quarter.
The average negative equity amount has reached a record $6,458, with 22% of affected consumers owing over $10,000.
Factors contributing to this trend include high vehicle prices during the 2021-2022 inventory crunch and longer loan terms adopted by consumers.
Negative equity is widespread across all vehicle types, not limited to luxury cars, affecting a broad range of consumers.
To avoid negative equity, experts advise holding onto vehicles longer, maintaining them well, and choosing cars with higher resale values.