Auto debt continues to be a growing challenge for U.S. car buyers, and new data from Edmunds shows the pressure is intensifying. In Q4 20251, 29.3% of trade-ins toward new-vehicle purchases were underwater, meaning owners owed more on their vehicle than it was worth at the time of trade-in. That marks the highest share Edmunds has recorded since Q1 2021, when 31.9% of trade-ins were underwater.
But the growing share of underwater trade-ins is only part of the story. The amount of debt buyers are carrying into their next purchase has reached an all-time high. In Q4 2025, the average amount owed on underwater trade-ins climbed to $7,214, the highest level Edmunds has ever recorded.
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