Consumer Auto Loan Negative Equity Status 2019 v 2020
What is Negative Equity when it comes to an Auto Loan?
Negative Equity also called “Upside down”, is a situation that occurs when a consumer owes more on his vehicle’s loan than the vehicle is worth.
Example:
2018 Honda Accord
Actual Cash Value = $18,500
Balance Owed on Loan = $21,000
Equity = – $2,500 (Negative)
The average negative equity on vehicle trades has been rising steadily for years, reaching a record high in April 2020 at $5,035. This is due in-part to very long finance terms (60 month, 72 months and 84 months).
Negative Equity Comparison 2019 V 2020
The table below shows the average negative equity amount as recorded by dealers at the time of trade-in.
October 22, 2020
