00:00It's Benzinga, bringing Wall Street to Main Street.
00:02U.S. car buyers are increasingly facing negative equity when trading in vehicles,
00:07as more borrowers owe more than their cars are worth, according to the Wall Street Journal.
00:12Edmunds said about 30% of trade-in borrowers had negative equity in the first quarter,
00:18with an average of $7,200 owed, up 42% from five years ago.
00:24The trend stems from high pandemic-era car prices and rising interest rates.
00:29Car buyers are extending loan terms to about 70 months or longer to manage costs,
00:33leading to monthly payments above $1,000 that can last more than eight years.
00:38Consumers who rolled over negative equity were more than twice as likely to have their car
00:42repossessed within two years than those who gained money on a trade-in.
00:46Cox Automotive said loan defaults in March hit the highest level since 2010.
00:51For all things money, visit Benzinga.com.
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