A record number of American auto buyers are trapped in a debt spiral that follows them from one vehicle to the next. An estimated 30.5 percent of car buyers who trade in a vehicle owe more on it than it is worth, according to J.D. Power’s automotive forecast for March—up 4.2 percentage points from a year ago. The average amount owed on those underwater trade-ins hit $7,214 in the fourth quarter of 2025, an all-time high, according to Edmunds. More alarming still, 27 percent of those trade-ins carried $10,000 or more in negative equity, also a record. “It’s the amount underwater that is the real, and troubling, story,” said Joseph Yoon, a consumer insights analyst at Edmunds. When that debt is rolled into a new loan, the average monthly payment rockets to $916—$144 more than the average new-car buyer pays. New cars aren’t getting cheaper, either. The average price hit $49,353 in February, up 30 percent since 2020.
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