More Americans are finding themselves upside down on their car loans, according to Edmunds. Q3 2025 data from Edmunds shows that a growing share of owners are trading in vehicles worth less than what they owe — and the debt they are rolling forward is growing:
Analysts warn of long-term consequences
“The sheer amount of debt consumers are carrying in their trade-ins should be a wake-up call,” said Ivan Drury, Edmunds’ director of insights. “Nearly one in three upside-down car owners owe between $5,000 and $10,000 — and a growing share owe far more than that. Much of this stems from shoppers trading out of vehicles too quickly, or carrying loans taken out during the pandemic car market frenzy, when prices were at record highs. Those choices are now catching up, making it far harder to buy again without piling on even more debt.”
Rolling debt drives higher monthly payments
To highlight the financial effect of rolling negative equity into a new vehicle purchase, Edmunds analysts compared the costs for consumers who financed a new vehicle involving a trade-in with negative equity in Q3 against the industry average for all financed new vehicles. The average monthly payment for buyers who rolled negative equity into a new loan was $907 in Q3, down slightly from Q2’s high of $915 and $140 more than the overall industry average monthly payment of $767. They also financed $11,164 more than the typical new-vehicle buyer.
| Year | Share of New Vehicles Purchased with a Trade-in | Share of Trade-ins with Negative Equity | Average Amount of Negative Equity | Average Trade-in Age (Years) |
| 2025 | 44.6% | 28.1% | -$6,905 | 3.7 |
| 2024 | 43.2% | 24.2% | -$6,458 | 3.6 |
| 2023 | 44.4% | 18.5% | -$5,808 | 3.2 |
| 2022 | 45.2% | 15.5% | -$4,894 | 2.9 |
| 2021 | 48.6% | 19.4% | -$4,200 | 3.2 |
| 2020 | 48.3% | 31.6% | -$4,964 | 3.5 |
| 2019 | 45.9% | 34.0% | -$5,251 | 3.6 |