New car sales have plummeted about 50% since the coronavirus pandemic took hold in the U.S., and used car values have dropped as well. With great incentives on new cars, such as 0% financing for 72 months, and a slew of off-lease and retiring fleet vehicles, there is an overwhelming supply of used cars on dealer lots and at auction houses.

This could mean the car you planned on trading in to take advantage of some of these new car deals may not be worth as much as it was two months ago. Used car prices were down more than 11% in April, and J.D. Power expects them to be down 7% through June.

What that means is a record number of car owners who are upside down on their current car loans may owe money on their trade-in, instead of getting credit from it toward a new car. Edmunds reported 44% of new vehicle sales with a trade-in had negative equity in April, up from 33% in…

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