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Negative Equity

Negative equity, as defined in the dictionary is: Being or holding an asset that is worth less than its purchase price of the debt owed on it. Commonly, negative equity is referred to as being upside down.

The record high for negative equity per vehicle was in January 2018. August was the first month in 2018 that the average negative equity per vehicle fell below $5,000 according to Edmunds.

Aug. 2018 Aug. 2017
Average Negative Equity $4,938 $5,086
Trade-ins with negative equity 30.9% 31.6%

There are solutions in controlling negative equity on a vehicle loan. Such as discussing the trade-in value vs. amount owing with your loan officer prior to trading your current vehicle.