Rising vehicle prices and negative equity trap consumers with payments exceeding $900 monthly amid depreciating asset values.
A 26-year-old borrower faces a $900 monthly payment on a Chevrolet Silverado 3500HD after financing $60,000, including negative equity from a trade-in. The truck’s value has since dropped to $39,000, leaving her with $53,000 in remaining debt.
Data from Edmunds shows over 30% of US vehicle trade-ins involve negative equity, as buyers roll over debt into new loans. Rising interest rates and higher sticker prices have exacerbated the trend, pushing monthly payments to record levels.
Borrowers like Cassie now confront difficult choices: selling privately to cover the shortfall or trading in for a cheaper vehicle while rolling over remaining debt.