A growing number of car owners are finding themselves underwater on their auto loans, according to new data from the auto shopping website Edmunds.com. In short, that means what they owe is larger than what the cars are actually worth.

Edmunds reported that underwater trade-ins are at their highest record since the first quarter of 2021, during the pandemic, when 31.9% of new-car trade-ins were upside down.

The latest data from Edmunds for the second quarter of 2025 revealed that more than 1 in 4 new vehicle trade-ins are underwater. Simply put, that means 26.6% of trade-ins for new cars had negative equity, up from 26.1% in Q1 2025 and 23.9% in Q2 2024.

The most recent data showed many Americans with upside-down car loans owed, on average, $6,754 in Q2 2025—up from $6,255 for the same

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