(news nation) — A growing number of car owners now owe more on their loans than their cars are worth, according to a new study commissioned by an online website. Car buying site CarEdge.
“With vehicle prices rising and depreciation accelerating, more car owners are finding they owe more on their loan than their car is worth,” says CarEdge, which serves nearly 1,000 drivers. It was concluded from the targeted research.
31% of all drivers who have financed their car now; negative capitalthis number increases to 39% for vehicles purchased in the last two years. That makes new car buyers especially vulnerable, CarEdge says.
“As vehicle prices rise and long-term loan terms become more common, the risk of submergence is greater than ever,” the report said.
The negative capital for those who buy electric cars is much larger. According to the survey, 46% of EV owners are submerged in water. tesla and BMW Owners have a high percentage of negative equity.
Another surprising finding is that 61% of drivers surveyed overestimate the value of their car. About 17% believe their car is worth at least $5,000 more than its actual trade-in value.
CarEdge said the disconnect could create an unpleasant surprise for drivers when trading in or selling their current vehicle.
