Nearly 30 percent of trade-ins toward new-vehicle purchases in the second quarter of 2026 carried negative equity, pushing average monthly payments and total interest costs to all-time highs, according to Edmunds. The share of underwater trade-ins reached 29.6 percent, the highest for a second quarter since 2020, while the average negative equity amount hit a Q2 record of $6,884. Buyers rolling that debt into a new loan faced an average monthly payment of $944, $167 above the industry average, and are projected to pay $16,270 in interest over the life of the loan, nearly $6,500 more than the typical new-vehicle buyer. Edmunds analysts note that the average age of underwater trade-ins rose to a Q2 record of 4.0 years, aligning with vehicles purchased during 2022's peak pricing and low incentives. Even models known for strong resale value, such as the Chevrolet Silverado 1500 and Toyota Camry, appeared among those with the highest negative equity, underscoring that the trend is driven by financing conditions rather than vehicle choice alone.
Toyota Motor Corp.High negative equity and record payments may dampen new-vehicle demand, affecting Toyota sales.
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