'Underwater' car trade-ins are at a 4-year high: What that means when buying a new vehicle

[MichMan]

15. That would require even more stupidity than I gave them credit for

With the prices of new cars rising every year, coupled with a rise in interest rates, I doubt there is much savings from trading down once you add the negative equity to the loan. The Loan to value ratios would still need to pass the lender's requirements

I suppose if you traded a two year old Cadillac Escalade on a Mitsubishi Mirage that would work, but doubtful that would account for the 26% that are underwater.

I imagine some people expected the student loan moratorium would last indefinitely and are now facing the reality of having to make those payments again and making their luxury vehicles now unaffordable.