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Nearly 30 percent of trade-ins carried negative equity in Q2 2026.
Average underwater loan balance reached a record Q2 high of $6,884.
Popular trucks and SUVs are now often trapped by expensive financing.
Remember when choosing a vehicle that held its value was considered a smart financial move? Apparently that’s no longer enough. A new report shows that millions of Americans are trading in vehicles worth less than what they still owe , and the problem continues to grow.
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According to Edmunds’ second-quarter data, 29.6 percent of all trade-ins toward new vehicle purchases carried negative equity. Put another way, nearly three out of every 10 buyers walked into a dealership already owing more on their current vehicle than it was worth.
The Debt Keeps Growing
The amount of debt being rolled into new loans is climbing too. The report says the average underwater trade-in carried $6,884 in negative equity during the second quarter, setting a new record for that period of the year.
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Related: He Owed $87K On A $47K Ford Truck And Still Wanted To Trade In For A Mercedes
Unfortunately, that debt doesn’t simply disappear. It gets folded into the next loan, creating a financial snowball that can follow owners from vehicle to vehicle. The result is some eye-watering payment figures. Edmunds found that buyers carrying negative equity into a new car loan are now paying an average of $944 per month, a whopping $167 more than the industry-wide average.
The long-term cost is even more painful. Those borrowers are expected to pay an average of $16,270 in interest over the life of their loans. That’s nearly $6,500 more than the typical new-vehicle buyer.
Negative Equity Growth, 2019-26
Share of New Vehicles
Purchased With A Trade-In Share of Trade-Ins
With Negative Equity Average Amount Of
Negative Equity Average Trade-In
Age (Years)
2026 46.2% 29.6% -$6,884 4.0
2025 45.7% 26.6% -$6,754 3.8
2024 44.8% 23.9% -$6,255 3.7
2023 46.2% 17.3% -$5,543 3.4
2022 46.8% 14.7% -$4,487 3.2
2021 50.8% 23.1% -$4,246 3.6
2020 45.6% 37.2% -$5,845 3.9
2019 44.6% 34.6% -$5,317 3.8
SWIPE
Source: Edmunds
What’s particularly surprising is that this isn’t just happening to owners of vehicles with weak resale values. The publication says many of the biggest negative-equity trade-ins are popular trucks and SUVs that traditionally retain value well, like the Toyota Tacoma , Jeep Wrangler and Honda CR-V.
“It’s easy to assume negative equity is just a story about vehicles that depreciate quickly,” said Ivan Drury, Edmunds’ director of insights. “When historically safe residual value bets are showing up underwater, it’s clear this is a financing problem, not always a vehicle choice problem.”
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A big part of today’s problem can be traced back to 2022, when inventory shortages pushed prices skyward and many buyers paid at or above sticker price. Those vehicles are now reaching the point where owners want to trade them in, only to discover they’re still carrying substantial debt.
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Trade-Ins With Highest Negative Equity, Q2 2026
Model Average Negative Equity
Chevrolet Silverado 1500 -$8,516
Ford F-150 -$8,417
Toyota Camry -$7,030
Ram 1500 -$8,347
Nissan Rogue -$7,260
Honda CR-V -$4,722
Toyota Tacoma -$7,793
Chevrolet Equinox -$5,668
Honda Accord -$5,127
Toyota Corolla -$6,191
GMC Sierra 1500 -$8,568
Honda Civic -$4,778
Ford Explorer -$7,689
Toyota RAV4 -$6,815
Hyundai Tucson -$5,532
Jeep Wrangler -$7,867
Toyota Tundra -$8,929
Kia Sportage -$5,568
Chevrolet Traverse -$6,962
Jeep Grand Cherokee -$7,357
SWIPE
Source: Edmunds
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