Lots of people who bought cars during the pandemic are deeply underwater on those vehicles, meaning the amount they owe is considerably higher than the actual value of the vehicle. Among car buyers who traded in a car to buy a new one, 30 percent had negative equity on their trade-in, owing an average of $7,200. One thing that may have caused the surge is the emergence of the 84-month (seven year) car loan; 42.6 percent of underwater buyers had an 84-month loan, about double the level of a decade ago.
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