EDMUNDS SHOCKS The Auto Industry (SCARY NEW DATA!) | Episode 1114

Negative equity is when you owe more on your auto loan than the vehicle is worth. In this segment, the hosts quantify it for Silverado owners and explain how it affects trade-ins and the next loan.

A trade-in is when you hand in your current vehicle to a dealer as part of the deal for a new car. The segment explains how negative equity can carry into the next purchase during a trade-in, increasing the amount financed.

Chevrolet is the automaker behind the Silverado, and this segment discusses Chevrolet’s financing promotions as a way to keep customers buying despite negative equity. The key point is how marketing offers (like 0% financing) can interact with trade-in debt.

Ford is mentioned as a comparison point to Chevrolet in how auto financing and trade-in debt can affect customers. The hosts say they have evidence Ford is doing something similar regarding approvals and negative equity.

0% financing is an auto loan offer where the lender charges no interest rate. The hosts discuss how Chevrolet’s 0% financing promotion can encourage customers to buy again even when they’re carrying negative equity.

Deferred payments are loan terms that delay when you start making payments. In this segment, the hosts describe a promotion with 90 days (about three months) of deferred payments, effectively stretching the offer’s timeline.

The Chevrolet Silverado 1500 is a full-size pickup truck, and this segment focuses on how Silverado owners can end up with negative equity when they try to trade it in. Negative equity means the loan balance is larger than the truck’s current market value, so rolling that gap into a new loan can make the situation worse over time.

“Upside down” is the common consumer phrasing for negative equity—your loan balance is higher than the car’s current value. The segment uses it to describe how far underwater some buyers are after a few years.

The Ford F-150 is a best-selling full-size pickup, and it’s being used here as an example of how financing terms can affect buyers. The discussion focuses on how incentives and lower interest rates can still lead to debt problems when combined with long loan terms and negative equity.

“Sub-vented” appears to refer to subsidized financing—dealer or manufacturer programs where the effective interest rate is reduced because someone (often the automaker) is helping cover part of the cost. The key point is that lower rates can make deals look affordable even when the overall financing structure still creates risk.

“Loan terms” are the length of time you have to repay an auto loan, usually expressed in months. Longer terms (like 72 or 84 months) can lower the monthly payment, but they also increase total interest paid and can worsen the loan’s risk profile if the car’s value drops.

Loan-to-value (LTV) ratio compares the loan amount to the car’s value (usually the purchase price or appraised value). Higher LTV means you’re borrowing a larger share of the car’s value, which increases the risk of negative equity if the car depreciates faster than the loan balance is paid down.

Collateralized means the lender’s risk is backed by the vehicle’s value. If the loan amount exceeds the car’s value (often due to depreciation and/or negative equity), the loan becomes less collateralized.

The Toyota Camry is a mainstream midsize sedan known for strong reliability and typically better-than-average depreciation. In this segment, it’s used as an example of how dealer markups during tight supply can still leave owners “upside down” on their loans.

Dealer markups are extra charges added on top of the vehicle’s base price, often when demand is high and inventory is scarce. The segment argues these markups don’t increase the car’s resale value, so they can worsen loan-to-value problems as the car depreciates.

The Toyota RAV4 is a compact SUV that’s commonly financed, so dealer add-ons can quickly affect the total amount you owe. In this segment, the hosts connect financing aftermarket charges to negative equity, which can make it harder to trade the vehicle later.

“Ram” in this context refers to the Ram 1500 pickup line, a full-size truck commonly bought for towing and everyday use. The podcast is citing it because buyers can end up with large negative equity when the truck’s market value doesn’t hold up as expected after purchase. That’s why it’s included in the list of vehicles with substantial loan shortfalls.

The Ram 1500 is a full-size pickup, and this segment highlights how truck buyers can end up with large negative equity. The hosts cite a specific negative-equity figure for Ram 1500 owners, tying it to the deal structure and depreciation.

The Nissan Rogue is a compact crossover, and here it’s used as the trade-in comparison point against a Ram 1500. The hosts mention average trade-in negative-equity context to show how different vehicles can end up with different levels of “upside down” debt.

The Honda CR-V is a compact SUV, and the hosts call it an “anomaly” because its negative equity number is much smaller than the trucks they’re discussing. That contrast is used to illustrate how financing and dealer add-ons can still create debt problems, but the magnitude varies by model.

A market adjustment is an extra dealer markup added to a vehicle’s advertised price (often above MSRP) based on local demand. It can push buyers into paying more than the car is worth, increasing the odds of ending up with negative equity later.

The Chevrolet Equinox is a compact SUV that’s being used here as an example of how trade-in values can lag behind loan balances. The hosts are citing a specific “upside down” figure to illustrate the negative-equity problem.

The Honda Accord is a mid-size sedan being referenced as part of a lineup of vehicles with trade-in “upside down” loan situations. In this discussion, it’s used to show that the negative-equity issue isn’t limited to one type of car.

The Toyota Corolla is being used as a baseline example of a high-volume compact car that can still end up with negative equity. The segment’s takeaway is that loan balances and trade-in values don’t always move together.

The GMC Sierra 1500 is a full-size pickup being called out with a large average “upside down” amount. It’s used to emphasize that negative equity can hit trucks too, not just sedans and SUVs.

The Honda Civic is mentioned as having a smaller average “upside down” amount than some other vehicles in the comparison list. It’s part of the broader point that different models can have different levels of negative equity.

The Ford Explorer is used as another data point in the segment’s negative-equity comparison. The hosts cite an average “upside down” figure to show how trade-in outcomes can be unfavorable even for mainstream SUVs.

CarMax is a used-car retailer that can buy vehicles directly from consumers. The hosts recommend getting offers from CarMax to create competition against dealers when you’re selling or trading a car.

Carvanic is referenced as another place to get offers for your current car. In this segment, it’s part of the strategy of shopping your trade-in value rather than accepting a dealer’s first number.

“Lowball” (used here as “low ball”) means offering an intentionally low price for your trade-in or used car. The hosts argue dealers do this to maximize profit on the new vehicle while minimizing what they pay for your current one.

The Hyundai Tucson is listed with an average “upside down” amount, continuing the segment’s model-by-model comparison. It reinforces that negative equity can affect mainstream compact crossovers too.

The Jeep Wrangler is included in the same negative-equity comparison list with an average “upside down” figure. The takeaway is that even desirable, enthusiast-friendly vehicles can still be worth less than what owners owe.

An “informed shopper” is someone who gathers multiple quotes and understands the deal structure before committing. In this segment, that means comparing trade-in offers and being aware of how dealer pricing can shift value between the trade-in and the new car.

The Toyota Tundra is a full-size pickup truck designed for towing, hauling, and everyday driving. It’s being discussed here because the podcast is focusing on how far some buyers can be “upside down” on their auto loans when the market value drops relative to what they paid. The mention of the Tundra highlights that this issue isn’t limited to one type of vehicle.

The Kia Sportage is a compact SUV aimed at buyers who want practical daily transportation with modern features. In this podcast segment, it’s referenced as one of the vehicles showing significant negative equity, meaning some buyers owe more than the current resale value. That makes it relevant to discussions about depreciation and financing outcomes.

The Jeep Grand Cherokee is a mid-size SUV that blends family-friendly comfort with available off-road capability. In this podcast segment, it’s mentioned as part of a list of vehicles showing notable negative equity, meaning buyers may owe thousands more than the current resale value. That makes it relevant to conversations about financing risk and depreciation.

The Audi Q7 is a mid-size luxury SUV, and the 2027 model is being discussed here specifically in terms of pricing and how it affects monthly payments. The hosts focus on an $8,900 MSRP increase and how that translates into higher financing costs, which can strongly influence whether buyers move up or walk away.

A car payment is the monthly amount you owe when financing or leasing a vehicle. This segment repeatedly ties MSRP increases and negative equity to the resulting monthly payment impact, emphasizing how small changes in price or trade-in value can compound over the loan term.

In this context, “finance” refers to borrowing money to buy the vehicle, typically through an auto loan. The hosts use a rule-of-thumb conversion (“$20 for every thousand finance”) to estimate how the financed amount affects monthly payments.

The Volkswagen Atlas is a large three-row family SUV, and the 2027 redesign is being used as another example of how pricing is climbing. The segment cites a smaller year-over-year increase ($2,350) and a starting price, showing how even “less dramatic” changes still add up for financed buyers.

MSRP (Manufacturer’s Suggested Retail Price) is the sticker price automakers publish for a vehicle before discounts, incentives, or dealer negotiations. The hosts use MSRP increases (like the Audi Q7’s extra $9,000) to estimate how much that higher base price can raise monthly payments.