by Problem with Auto Loans: Every Fourth Buyer is “in the Red”
A study showed that 26.6% of auto trade-in deals in the second quarter had negative equity. This is the highest rate in the last four years. The average debt amount was $6,754, which is $499 more than a year ago.
The situation varies: 32.6% of cases have debt from $5,000 to $10,000, 23.4% have over $10,000, and 7.7% have over $15,000. Buyers who rolled over debt into a new loan pay on average $159 more per month than other dealership customers.
“If you are planning to replace your car but still have an outstanding loan, first assess your finances. Often, the smartest decision will be to continue using your current vehicle,” advises Joseph Yoon from Edmunds.
In recent years, the negative equity situation has worsened. In 2022, only 14.7% of deals had this problem, whereas in 2025 it’s already 26.6%. Experts link this to the financial illiteracy of buyers and recommend always checking the loan balance before trading in a vehicle.
