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Banking, Economy

“More borrowers are going underwater on car loans”

“Consumers, salespeople and lenders are treating cars a lot like houses during the last financial crisis: by piling on debt to such a degree that it often exceeds the car’s value. This phenomenon—referred to as negative equity, or being underwater—can leave car owners trapped.

Some 33% of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity, compared with 28% five years ago and 19% a decade ago, according to car-shopping site Edmunds. Those borrowers owed about $5,000 on average after they traded in their cars, before taking on new loans. Five years ago the average was about $4,000…”

https://www.marketwatch.com/story/more-borrowers-are-going-underwater-on-car-loans-2019-11-09-111032935

Do not do this. Do not over borrow. Get a car and a house for that matter that’s affordable. Trying to keep up with “Mr. & Misses. Jones” will end in disaster.

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