Americans have a huge automotive debt problem right now. A new survey shows that 31 percent of American drivers who financed their car are u nderwater on their loans. The problem is even worse for EV owners – 46 percent of those folks have negative equity in their electric cars .
Furthering the issue is the fact that over half of the drivers surveyed overestimated their vehicle’s value . Rough. CarEdge – an automotive buying guidance website – carried out the survey in partnership with Black Book.
They talked to about 1,000 drivers to figure out just how much financial trouble some folks were in when it came to their cars. The results are..
. not super great. Here’s what the survey found when it comes to negative equity: CarEdge says that loan terms directly impact a vehicle’s equity .
Car owners with 84-month loan terms are about $5,000 underwater on average. On the flip side, buyers with a 36-month loan typically have about $12,340 in equity. Sure, longer loans reduce monthly payments, but they increase the likelihood of negative equity long term.
That’s not something you should typically want out of a car purchase. Something that really isn’t helping matters is the fact most people are greatly overestimating how much their cars are worth in the real world . CarEdge found that 61 percent of the folks surveyed think their car is worth more than it actually is.
17 percent say their car is worth at least $5,000 more than the true trade-in value. Not only is it s.
