Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
The average amount of positive equity reached $13,330 in the second quarter, an all-time high, according to Edmunds.
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Despite the recent rise in vehicle trade-ins with negative equity, more than two-thirds of trade-ins toward new-vehicle loans are above water, according to Edmunds.
Data compiled by the car-shopping website show that the average amount of positive equity reached $13,330 in the second quarter, nearly double that before the Covid pandemic struck.
Used-vehicle values rose between 2021 and 2022, and in the first quarter of 2022 over 83% of all trade-ins toward new-vehicle purchases carried positive equity. Since then, used-vehicle demand has slowed but remained strong, and in this year's second quarter the share of positive equity trade-ins was nearly 69%. While the share has shrunk since 2022, the dollar amount has grown by roughly $1,000, according to Edmunds.
The company credited today’s equity surge to the “average car buyer” who bought a mass-market model around 2019 with a conventional 60- or 72-month loan, because those vehicles have cleared the depreciation curve, and secondary-market values for reliable used vehicles remain high.
Some of the most commonly traded-in vehicles with positive equity in the second quarter include the Honda CR-V, Ford F-150 and Chevrolet Silverado 1500.
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