What’s the appeal of these new Cybertrucks? Do people enjoy riding around in a dumpster? 🚛 Hey, if it’s not taking us to Mars, we don’t want it. 🚀
If you bought a car recently, you might have also saddled yourself to a pretty hefty car loan. What happens when things turn upside down? 🙃 We’ve got the latest data and deets right here.
Here’s Five Fast Facts on Americans and their car loans:
- 🚗 Loan Down Under - According to new data, within the last three months ending in September, over 24% of Americans owed more on their trade-in vehicle than what it was worth. This is also known as being “underwater” or “upside down.” The recent number is up significantly from last year’s 18.5%.
- 📈 Tricks of the Trade-In - How much do Americans owe on their trade-ins? The amount recently hit a record high average of around $6,500. Some people owe even more, with 22% owing at least $10,000 and 7.5% owing at least $15,000. Major yikes.
- ⛈️ Perfect Storm - Why are we in this mess? Well, for one thing, anyone who bought a car in 2021-2022 fresh off the pandemic paid a premium price. The inventory crunch at that time caused many to pay over MSRP. As the economy slowed down, inventory went back up and car makers brought back incentives, bringing the value of trade-ins down.
- 💸 Thousand Island - On top of that, many Americans are getting into longer car loan terms to get a more manageable monthly payment. However, even when things are stretched out, some people still have payments of $1,000 or more (17.4% of new car buyers).
- 💡 Smart Car - If you’re currently shopping around for a new car, make sure to take advantage of incentives and low financing if they’re available. Look for a car with a high resale value, or at the very least one that’s great on gas and/or cheaper to insure.
🔥Bottom line: Another pro tip: make sure you really like the next car you buy. You’ll wanna hang onto it over the long haul to avoid going upside down! If you feel like you’re underwater and drowning in bills, you’re not the only one. Check out this article where we chat about why Americans are falling behind on bills.
How much is your monthly car payment?
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