For a growing share of new-car buyers with a vehicle to trade in, an unwelcome part of their old loan follows them in their new purchase: negative equity.
An estimated 30.5% of car buyers with a trade-in owe more than the car is worth, according to J.D. Power's automotive forecast for March. It's also known as being underwater on your loan or upside down.
The share of underwater buyers is up 4.2 percentage points from a year ago and has been growing since 2022. However, it's not as high as it was before the pandemic: In 2019, the annual share of trade-ins with negative equity for new-car purchases was 33.6%, according to J.D. Power data.
"The recent trend has been toward mean reversion," said Tyson Jominy, a senior vice president for J.D. Power.
The average amount owed on these underwater trade-ins reached $7,214 — an all-time high — in the fourth quarter of 2025, according to auto site Edmunds. Also, 27% of these trade-ins carried $10,000 or more in negative equity, also a record high.
