More drivers across the country are "underwater" or "upside down" on their auto loans — meaning they owe more money than the car is worth. That's costing them when it comes time to buy a new car.

About 26.6% of trade-ins toward new car purchases had negative equity in the second quarter of 2025, according to Edmunds, an auto site. That figure is up slightly from 26.1% in the first quarter of the year, and the highest it's been in the last four years, said Ivan Drury, the director of insights at Edmunds.

The last time it was higher was in the first quarter of 2021, when 31.9% of new car trade-ins were underwater, according to the report.

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