Millions of Americans owe more on their cars than they're worth. Here's how to get out of negative equity.

Millions of Americans owe more on their cars than they’re worth, leaving many drivers trapped in negative equity when they sell, trade in, or refinance. The article cites Edmunds data showing that in the first quarter of 2026, more than 3 in 10 drivers who traded in a vehicle owed over its current value, the highest share since 2021. The average deficit was $7,183 per vehicle. It explains that negative equity isn’t always the result of financial trouble, but is often driven by rapid depreciation, longer loan terms, high APR, small or no down payments, and adding taxes, fees, or add-ons into the loan balance. It also notes that drivers can be exposed if they total the vehicle and the insurance payout does not cover the remaining loan amount. The piece describes how to calculate being “underwater” by comparing the car’s current value to the lender’s payoff amount, which may include interest through a specific payoff date.