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Rising Negative Equity Hits Vehicle Trade-Ins Hard

1/29/2025

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Summary

Story summary

Consumers are increasingly trading in vehicles with negative equity, averaging $6,838 owed on loans.
In Q4 2024, 24.9% of trade-ins had negative equity, a rise from 20.4% in Q4 2023.
Electric vehicles experience greater depreciation, with average negative equity at $10,186.
Trading in underwater vehicles may lead to higher borrowing costs and monthly payments for consumers.

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Story summary

Consumers are increasingly trading in vehicles with negative equity, averaging $6,838 owed on loans.
In Q4 2024, 24.9% of trade-ins had negative equity, a rise from 20.4% in Q4 2023.
Electric vehicles experience greater depreciation, with average negative equity at $10,186.
Trading in underwater vehicles may lead to higher borrowing costs and monthly payments for consumers.