Authored by Bill Pan via The Epoch Times,
Almost three in 10 vehicles traded toward a new car are worth less than the amount still owed on their loans, a new report suggests.
In the third quarter of 2026, about 29.1 percent of trade-ins with outstanding loans carried negative equity, according to an Oct. 21 analysis by car-shopping platform Edmunds. That was down from 30.9 percent at the beginning of the year but above 28.1 percent in the same quarter of 2025.
While the share of so-called underwater trade-ins has eased slightly this year, the amount borrowers owe has continued to climb.
Drivers trading in underwater vehicles owed an average of $7,107 more than their cars were worth in the third quarter, the highest third-quarter figure in at least a decade, according to Edmunds.
That was more than $1,800 above typical levels before the COVID-19 pandemic. Between 2016 and 2019, the average deficit generally ranged from about $5,000 to $5,500.
The financial burden grows when drivers roll that unpaid balance into a new car loan.
Consumers who did so in the third quarter financed an average of $57,235, up more than 44 percent from $39,732 in the same period in 2019, Edmunds said. Their average monthly payment climbed to $952 from $646 over that period.
At an average interest rate of 8.1 percent, those borrowers are expected to pay about $16,610 in interest over the life of their loans, nearly 83 percent more t
