Edmunds reported that 29.6% of trade-ins applied to new-vehicle purchases carried negative equity in the second quarter of 2026. The average underwater amount was $6,884.

A sound appraisal can still fail to produce a trade when the payoff gap, lender advance and customer cash position do not fit the replacement deal. That failure should not automatically be coded as a price objection.

Underwater trade-ins29.6%New-vehicle purchases in Edmunds data
Average negative equity$6,884Underwater trade-ins in Q2 2026

Separate appraisal from finance failure

Acquisition reporting should distinguish offer declined, competitive loss, inventory mismatch and unfinanceable payoff gap. Those reasons require different responses.

Build a direct-purchase alternative

Some owners may be able to sell without replacing the vehicle, bring cash to close the lien or return later after the payoff changes. Staff should explain options without implying approval or encouraging an unaffordable structure.

Methodology note

The population is trade-ins toward new-vehicle purchases in Edmunds transaction data, not every vehicle appraisal or used-vehicle trade.

References

Cited references

  1. Edmunds Q2 2026 negative-equity analysis — Commercial transaction analysis