‘Underwater’ Car Loans Signal US Consumers Slammed by High Rates
Negative equity on automobiles is at the highest level in more than three years, with higher prices and borrowing costs hitting owners.
A surge in car buying and interest rates has strained finances and fueled an uptick in automobile repossessions.
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
It’s a tough time to be a car owner in the US.
Prices for new vehicles are high. Interest rate hikes have made loans more expensive. And many car owners now owe more on their loans than their vehicle is worth. This situation — commonly called being “underwater” or having “negative equity” — occurs when the price of a car falls faster than the owner can pay down the loan for it.