A growing number of drivers are finding themselves upside down on their car loans as car prices drop. According to the Edmunds Q4 2023 Used Vehicle report, trade-ins with negative equity are on the rise.
Here are 3 bullet points from that report:
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- Used car values continue on a downward trend. The average transaction price (ATP) for all used vehicles in Q4 2023 dipped to $28,371, a 4.4% decrease from $29,690 in Q4 2022.
- Trade-ins with negative equity are on the rise. 20.4% of new vehicle sales with a trade-in had negative equity in Q4 2023 — the highest in two years — compared to 17.7% in Q4 2022 and 14.9% in Q4 2021.
- Consumers who are upside down on their auto loans owe more than ever before. The average amount owed on upside-down loans climbed to a record high of $6,064 in Q4 2023, compared to $5,347 in Q4 2022 and $4,143 in Q4 2021.
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