A growing number of Americans have bitten off more than they can chew when it comes to auto loans. The build-up in negative equity — or the amount that debt exceeds a vehicle’s value — is rattling consumers and causing concern within the industry.
Though it’s not unusual for drivers to carry negative equity, some dealers say more people are arriving at their lots up to $10,000 underwater, or “upside down,” on their trade-ins. They’re buying at still-sky-high prices and rolling debt from one car to another and even onto a third. Loans are commonly stretching to seven years.