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US Auto Loan Negative Equity Reaches Highest Level Since 2021
11/27/2025, 18:05
AI SUMMARY
●28.1% of new car trade-ins involved negative equity in Q3 2025
●This marks the highest level of underwater car loans since early 2021
●The metric has risen significantly over the last three years indicating consumer credit stress
The Kobeissi Letter reports that 28.1% of trade-ins for new car purchases in Q3 2025 involved negative equity. This figure represents the highest level since the first quarter of 2021, surpassing levels seen during the height of the pandemic.
The data indicates that consumers are increasingly under financial pressure with their vehicle loans. The percentage of underwater trade-ins has risen by 12.6 points over the last three years, signaling potential stress in the broader consumer credit market.