Ivan Drury Reports High Negative Equity and Rising Costs for New Car Buyers
Ivan Drury, Director of Insights for Edmunds, reports that a significant number of new car buyers are facing high levels of negative equity, often owing more on their trade-in vehicles than they are worth. Data shows that nearly 30% of recent buyers were underwater on their trade-ins, with the average negative equity reaching $6,884 in the second quarter of 2026. This trend is driven by high vehicle prices and elevated interest rates, which have pushed the average financed new-vehicle purchase to an all-time high of $44,156. Drury notes that while many buyers are resorting to longer loan terms to manage monthly payments, this often results in higher total interest charges. Furthermore, he highlights that a majority of consumers entering the market have positive equity, which can serve as a best option for those looking to lower their monthly bills. However, high monthly payments, often exceeding $1,000, can hinder long-term wealth building and impact a borrower's debt-to-income ratio, potentially affecting future mortgage qualifications.