US Car Prices and Negative Equity Hit Record Levels in 2026

Vehicle prices for Americans remain high, with the average new car sold in early 2026 costing $48,899 and three‑year‑old used models averaging $32,553. Added technology, premium trims and lingering pandemic‑era supply‑chain constraints have kept prices elevated, prompting many buyers to stretch financing to 84‑month terms. Loan interest rates vary widely, from about 4.5% for borrowers with strong credit to roughly 16% for those with poorer scores.

Negative equity is also rising sharply. Edmunds data show that 29.6% of trade‑ins for new‑vehicle purchases were underwater in Q2 2026, the highest quarterly share since 2020, with an average deficit of $6,884. Underwater borrowers now face average monthly payments of $944 and projected lifetime interest of $16,270, well above the industry average.