Buyers who trade in an underwater vehicle and roll the debt into a new loan finance an average of $57,235 and pay $952 a month, according to Edmunds, as average negative equity on trade-ins reaches $7,107 in the third quarter.

In Q3, 29.1% of financed trade-ins toward new vehicle purchases are underwater, down from 30.9% at the start of the year but up from 28.1% a year earlier. The average deficit is more than $1,800 above prepandemic levels, when it typically ranged from $5,000 to $5,500.

Buyers who roll over that debt are on track to pay an estimated $16,610 in interest at an average APR of 8.1%, up nearly 83% from $9,093 in Q3 2019. Of those buyers, 91.2% finance for 72 months or longer. Compared with the average new vehicle buyer, they finance roughly $12,600 more and pay an additional $165 per month.

“For consumers looking to avoid this cycle, understanding their vehicle’s current value relative to what they owe is an important first step,” writes Jessica Caldwell, Edmunds’ head of insights. “Those who need to replace their vehicle sooner should focus on minimizing additional debt and evaluating the total cost of financing rather than the monthly payment alone.”

The report follows Edmunds’ Q3 auto finance report, which set new records for average amount financed, monthly payment and total interest, among others.

Read the full report at Edmunds