J.D. Power and GlobalData forecast that 26.9% of December 2025 trade-ins carried negative equity. Average incentive spending was projected at $3,433 per vehicle, with EV discounts materially higher than incentives on non-EVs.
The two measures interact in the deal structure. A larger discount can help offset a payoff gap, but it does not erase the debt; the remaining balance still has to be paid in cash, absorbed by trade value or financed within lender limits.
Desking needs one complete affordability picture
Managers should evaluate trade value, payoff, selling price, incentive eligibility, advance and payment together. Looking at the rebate without the equity position—or the payoff without the available discount—can misstate whether the transaction is actually financeable.
EV discounting deserves separate measurement
Larger EV incentives may reflect policy changes, inventory pressure, model transitions or manufacturer strategy. Stores should track discount dependence, age, turn and used-value exposure by model rather than treating a category average as universal.
F&I should also document which programs were applied and why the customer qualified. Forecast averages cannot substitute for a dated program bulletin.
The figures were commercial forecasts and do not establish final monthly results or individual program eligibility.
Cited references
- J.D. Power and GlobalData December 2025 forecast — Commercial market forecast