Nearly a third of all U.S. consumers trading in a vehicle during the first quarter were underwater — owed more than the car is worth — on their trades, the highest level in five years.
According to data from Edmunds.com, 30.9 percent of the cars, crossovers, and pickups traded in on a new vehicle in Q1 carried negative equity and the number is growing. With new vehicle prices rising and interest rates still higher than consumers are used to, buyers are shopping a monthly payment rather than the price of a new vehicle.
The average amount owed on a trade in Q1 was $7,183, which is the second-highest number on record. It’s also 42% more than the same period five years ago, Edmunds noted. Rolling over that kind of money adds nearly $150 to a monthly payment so those underwater buyers’ average monthly payment is now $932.
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