Skip to content
thelocalreport.in thelocalreport.in

Thelocalreport.in is a news website which includes national international,#sports,#wealth,#weather, #entertainment and other types of news.

  • Jammu and Kashmir
  • World
  • India News
  • Uk
  • Canada
  • United States
  • About Us
  • Contact Us
thelocalreport.in
thelocalreport.in

Thelocalreport.in is a news website which includes national international,#sports,#wealth,#weather, #entertainment and other types of news.

What to do if your car loan goes bad?

KANIKA SINGH RATHORE, 08/10/202508/10/2025

Add thelocalreport.in As A Trusted Source

Sign up to our breaking news email for free real-time breaking news alerts delivered straight to your inbox

Sign up for our free breaking news emails

Sign up for our free breaking news emails

More car buyers are finding themselves in a difficult situation financially. According to a recent report from Edmunds, more than 26% of new vehicle trades in the second quarter of 2025 had negative equity — the highest share in more than four years.

Negative equity refers to a situation in which you owe more on your vehicle than it is worth, causing your loan to be “upside down” or “underwater.” Negative equity is a serious problem when you trade in that vehicle for another new vehicle because you have to pay off your balance along with the new loan payments. The average amount owed on these reverse loans was $6,754, underscoring the increased risks of car loans in today’s market.

,consumers “Being underwater on car loans is not a new trend, but in today’s financial landscape the stakes are higher than ever,” said Evan Drury, director of insights at Edmunds. “Affordability pressures, from high vehicle prices to high interest rates, are exacerbating the negative effects of decisions like trading up too early or converting a loan to a new loan.”

In other words, it’s becoming easier than ever to reverse your debt. But you can take steps to avoid the worst of negative equity.

Keep your current vehicle longer

If you’re already skeptical, the easiest way to avoid digging into a deeper financial hole is to maintain your current vehicle and continue making payments. Time and patience are often your best allies. Each payment you make reduces the balance, while depreciation reduces after the first few years on your vehicle. Eventually, the loan balance will become less than the value of the vehicle.

ALSO READ  Shark's viral airwrape alternative plmets at the lowest price

This strategy requires discipline and the ability to resist the temptation to trade in something new. But this will help you avoid spending money you don’t have to. According to Edmunds data, buyers who had negative equity on their current vehicle and rolled it into a new vehicle loan paid an average of $915 per month, compared to the industry average of $756. They also financed $12,145 more than the typical new vehicle buyer.

Holding onto your current car until the balance is in full may not be exciting, but it’s often the safest way to keep your debt from growing.

Refinance or roll the loan into a new car lease

Refinancing can sometimes soften the blow of negative equity. If your credit has improved or interest rates are lower than when you first financed, a new loan can lower your monthly payments and give you time to catch up.

Another option is to lease your next vehicle rather than financing the purchase. You’ll still have to make higher monthly payments than usual because you’ll be paying off the negative equity of your current vehicle along with the lease payments on your new vehicle. At the end of the lease, you will no longer be in reverse, and you will walk away from your vehicle when the lease ends. But there is wear and tear hidden in it. You will not have a vehicle to use as a trade-in for your next purchase. You can either re-lease or finance your next new or used car purchase.

ALSO READ  Women working for refugee donations are facing 'disgusting' sexual comments

Avoid negative equity in the first place

The best solution is prevention. Edmunds experts say buying a brand-new car often puts you in the depreciation hole as soon as you drive it. A new car typically loses about 20% of its value within the first year, meaning even a modest loan could leave you owing more than the car is worth if you don’t make a large down payment. Solution? Buy used.

Buying a used vehicle helps you avoid the worst depreciation. A 2- or 3-year-old vehicle will still have plenty of life left in it, and should still have warranty coverage. If peace of mind is important, consider purchasing a certified pre-owned vehicle. These vehicles must pass dealership inspection and usually come with extended warranties. This strategy helps reduce the risk of being underwater for a year or two down the road.

Another important step is to make a larger down payment. Edmunds recommends aiming for at least a 20% drop. That cushion will help your loan balance reduce faster than the car’s value, giving you positive equity sooner.

Finally, avoid ultra-long loan terms. It is tempting to extend financing to 72 or 84 months to lower monthly payments. But by doing this you remain lying upside down for a longer time. A loan with a term of 60 months or less, while more expensive monthly, is more financially secure.

edmonds says

Being underwater on a car loan isn’t devastating, but it does require discipline to avoid it. The first step is prevention: shop smart, make solid down payments and avoid too long a loan. If you’re already upside down, your best option is usually to keep the car until you gain equity.

ALSO READ  Former Mi6 boss calls for back digital ID card to help reduce small boat crossings

,

This story was provided to The Associated Press by the automotive website Edmunds. Josh Jacquot is a contributor at Edmunds.

Uk Badcarloan

Post navigation

Previous post
Next post

Follow Us On Google News

  • Trump hits out at ‘The View’ co-host for calling him ‘the greatest president’ over controversy
  • Fox News host claims there’s an ‘anti-Semitic thread’ behind reaction to Bari Weiss
  • Hit-style shootings on Venezuelan activists in Colombia spark fears of widespread persecution by Maduro
  • Hamas has regained control in lawless Gaza, threatening the fragile ceasefire
  • London Silver Squeeze: Emergency Silver
  • How we test VPNs at The Independent
  • Trump administration is labeling No Kings protests as ‘Hate America’ rallies
  • Government cannot tolerate laziness without economic strategy
  • Prankster sends 50 Waymo driverless taxis into closed San Francisco street
  • Taco Bell will add new Crispy Chicken menu items in collaboration with Frank’s RedHot
  • Two rogue policemen sacked every day as officers prevented from policing hits record high
  • What to know about the arson and attempted murder at the Pennsylvania governor’s mansion
  • Erica Kirk’s full remarks on Charlie Kirk being awarded the Presidential Medal of Freedom
  • Musician who played ‘Ghostbusters’ outside ICE facility has been arrested by agents
  • Kristi Noem says Coast Guard will get paid despite government shutdown
  • Renovations That Can Increase Your Home’s Value by Nearly 25%
  • Cheryl Hines berated by The View co-hosts over husband RFK Jr.’s health claims
  • No soup for you: President Trump shuts down ABC News after cutting off JD Vance’s mic
  • Researchers say social media is hurting your child’s test scores
  • Claressa Shields Names the Fighter Who Can Beat Gervonta Davis – and It’s Not Jake Paul
  • Second suspect charged in deadly Alabama shooting that left 2 dead, 12 injured
  • WATCH: Eric Trump’s Exclusive New Interview
  • Documentary promising an ‘inside look’ at Melania’s inauguration gets a release date
  • Kenyan family seeks extradition of British citizen over woman’s death after spending night with soldiers
  • Study shows reformist voters more likely to live in areas with health problems
  • US auto giant warns of $1.6b problem after driver perks end
  • Accused Letitia James is harboring a fugitive: report
  • Haiti court orders new investigation into president’s assassination in July 2021 in major ruling
  • Kylie Jenner releases first song ‘Fourth Strike’
  • If Manny Pacquiao misses the Rollie Romero fight, who could he face next?
  • Nigeria vs Benin live: World Cup qualifiers result, Super Eagles guaranteed play-off
  • Warning issued amid flu season and five groups urged to get vaccinated
  • Sir Alastair Cook enjoying ‘bucket list’ role as Ashes commentator in Australia
  • Jammu and Kashmir
  • World
  • India News
  • Uk
  • Canada
  • United States
  • About Us
  • Contact Us
  • Jammu and Kashmir
  • World
  • India News
  • Uk
  • Canada
  • United States
  • About Us
  • Contact Us

Add thelocalreport.in As A Trusted Source in Google

Canada News

  • 7 injured after explosion reported at North York construction site
    7 injured after explosion reported at North York construction site
  • Toronto police officer injured in North York collision
    Toronto police officer injured in North York collision
  • Multifaceted student-athlete shows how to really manage a busy schedule
    Multifaceted student-athlete shows how to really manage a busy schedule
  • How 'OK Blue Jays' became an eternal ballpark tradition in Toronto
    How ‘OK Blue Jays’ became an eternal ballpark tradition in Toronto
  • Durham College student barred from attending convocation because of religious symbol
    Durham College student barred from attending convocation because of religious symbol
  • 'Is that $75 million?': Ontario's biggest Lotto Max winner is in disbelief
    ‘Is that $75 million?’: Ontario’s biggest Lotto Max winner is in disbelief

India News

  • Before Diwali, 1.86 crore women in UP will get free LPG cylinder on October 15.
    Before Diwali, 1.86 crore women in UP will get free LPG cylinder on October 15.
  • India to resume all international postal services to US from October 15
    India to resume all international postal services to US from October 15
  • Diwali 2025 in Ayodhya: Preparation for Deepotsav 2025 with 22 tableaux, 5 foreign Ramlilas
    Diwali 2025 in Ayodhya: Preparation for Deepotsav 2025 with 22 tableaux, 5 foreign Ramlilas
  • Delhi AQI today: GRAP 1 restrictions imposed in NCR due to deterioration in air quality
    Delhi AQI today: GRAP 1 restrictions imposed in NCR due to deterioration in air quality
  • Bihar Assembly Elections 2025: BJP announces 71 candidates; check full list
    Bihar Assembly Elections 2025: BJP announces 71 candidates; check full list
  • UP government announces Diwali Bonus 2025: Check how much state employees will get
    UP government announces Diwali Bonus 2025: Check how much state employees will get

Us News

  • London Silver Squeeze: Emergency Silver
  • Erica Kirk’s full remarks on Charlie Kirk being awarded the Presidential Medal of Freedom
  • No soup for you: President Trump shuts down ABC News after cutting off JD Vance’s mic
  • WATCH: Eric Trump’s Exclusive New Interview
  • Accused Letitia James is harboring a fugitive: report
  • Bombshell: Alex Jones says Deputy AG Todd Blanche has closed investigation into Ed Martin in Biden’s legal case!

Uk News

  • Trump hits out at 'The View' co-host for calling him 'the greatest president' over controversy
    Trump hits out at ‘The View’ co-host for calling him ‘the greatest president’ over controversy
  • Fox News host claims there's an 'anti-Semitic thread' behind reaction to Bari Weiss
    Fox News host claims there’s an ‘anti-Semitic thread’ behind reaction to Bari Weiss
  • Hit-style shootings on Venezuelan activists in Colombia spark fears of widespread persecution by Maduro
    Hit-style shootings on Venezuelan activists in Colombia spark fears of widespread persecution by Maduro
  • Hamas has regained control in lawless Gaza, threatening the fragile ceasefire
    Hamas has regained control in lawless Gaza, threatening the fragile ceasefire
  • How we test VPNs at The Independent
    How we test VPNs at The Independent
  • Trump administration is labeling No Kings protests as 'Hate America' rallies
    Trump administration is labeling No Kings protests as ‘Hate America’ rallies
  • World
  • United States
  • India News
  • Uk
  • Canada
  • thelocalreport.in Company Details
  • Terms and Conditions
  • DNPA Code of Ethics
  • Correction Policy
  • Contact Us
  • About Us
  • Rss Feeds
©2025 thelocalreport.in | WordPress Theme by SuperbThemes