Get access to the same vehicle valuation tool that dealers rely on. With Black Book, you’ll have insider data to accurately assess trade-in and purchase values—empowering you to negotiate the best possible deal.
Amid a volatile market and looming auto tariffs, a new consumer survey conducted by CarEdge reveals that most Americans are unwilling—or unable—to tolerate further increases in car prices and monthly payments. The Spring 2025 Car Buyer Survey, which gathered over 400 responses from prospective new and used car shoppers, shows just how sensitive demand is to monthly payment hikes.
Key Findings: New Car Buyers
Even without any additional price increase, 42% say they’ve already canceled their car purchase plans due to high prices.
65% of new car buyers say they would exit the market entirely if monthly payments rose by just 5%.
78% would be out if payments rose by 15%, and more than 83% would stop shopping entirely if payments climb 25%.
“These numbers make it clear: new car affordability is reaching a breaking point,” said Zach Shefska, Co-Founder and CEO of CarEdge. “If monthly payments increase even slightly, automakers are going to lose a huge chunk of their customer base.
From 2022 to 2024, incentives were increasing. Now, that trend is reversed, with incentives making up just 7% of the average transaction price. With auto loan rates averaging 9% APR for new cars, any decline in manufacturer incentives could spell trouble for buyers and sellers alike.”
Key Findings: Used Car Buyers
37% of used car shoppers report they’ve already given up on buying due to high prices.
Used car shoppers show similar price sensitivity, with 60% saying they’d be out of the market if prices rose 5%.
That figure climbs to 74% at a 15% price increase, and 82% of buyers say they’d walk away if payments rose 25%.
Income Breakdown: Even High Earners Are Walking Away
The latest CarEdge Car Buyer Survey highlights a striking reality: car buyers at all income levels are reaching their breaking point.
Lower income buyers are hit hardest: Among new car buyers with household incomes below $50,000, a staggering 51% have already canceled their purchase plans due to high prices.
For used car shoppers in the same income bracket, the figure is nearly identical at 49%.
Even middle-income households are feeling the pressure:
43% of new car shoppers earning $50,000–$100,000 have also exited the market.
37% of used car shoppers in this income range say they’ve given up their purchase plans.
And while some might assume high earners are unaffected by today’s car prices, the data says otherwise:
Higher-income households are slightly more resilient in the used market, but even among those earning $150,000 or more, 44% say they would be out of the market if used car prices rise by 5%.
Among households earning over $200,000 annually, 32% of prospective new car buyers say they’ve already walked away. In the used market, 25% of shoppers in this high-income bracket report the same.
While only 9% of all new car buyers said they wouldn’t change their plans regardless of price, that number jumps to 24% among households earning $150,000 or more.
“Car affordability impacts all households,” said Shefska. “Even six-figure earners are pushing back. That should be a wake-up call to automakers who have spent years increasing MSRPs and abandoning affordable (sub $25,000) vehicles.”
Across the board, households making over $100,000 per year are more price-sensitive than expected, with many drawing firm lines as affordability concerns mount. It’s not just new car shoppers who are reconsidering making a vehicle purchase. We see similar trends among used car buyers:
Shockingly, among households earning over $200,000 per year considering a used vehicle, one quarter say they’ve already canceled their purchasing plans. That’s the same percentage as those in the same income bracket who say they wouldn’t change their plans even if used car prices rose by 25%.
Market Implications
These findings come at a time when tariffs are threatening to push car prices even higher. The Trump administration’s recent pause on some trade duties does not include the automotive sector, where tariffs on imported vehicles remain in place.
“Any further price increases—whether from tariffs, panic buying, or other pressures—are likely to trigger a significant drop in demand,” noted Ray Shefska, CarEdge Co-Founder and used car sales veteran with 43 years of experience. “Automakers should think twice before pushing through further price hikes without offering offsetting incentives.”
The average new car transaction price is $47,962, according to Cox Automotive. A 5% increase in new car prices would send average transaction prices above $50,000 for the first time. Our data suggests that if that were to happen, 65% of would-be new car buyers would be out of the market.
Used Car Prices Are Not Immune
While the average used car is more affordable than a new one, used car prices are not insulated from the effects of rising new car prices. If tariffs or production constraints push new car prices even higher, many buyers will inevitably turn to the used car market—increasing demand and potentially driving up prices for pre-owned vehicles.
As of April 2025, the average used vehicle listing price stands at $25,180, well below the 2022 peak of over $28,000—but still high by historical standards.
“As demand shifts into the used market, we will see a second wave of price inflation,” Zach Shefska warned. “That could squeeze budget-conscious buyers even further and delay car ownership for many. We have already seen material price increases at dealer wholesale auctions, and we anticipate price increases to show up on the showroom floor quickly.”
About CarEdge
Founded in 2019 by father-and-son team Ray and Zach Shefska, CarEdge is a leading platform dedicated to empowering car shoppers with free expert advice, in-depth market insights, and tools to navigate every step of the car-buying journey. From researching vehicles to negotiating deals, CarEdge helps consumers save money, time, and hassle. Join the hundreds of thousands of happy consumers who have used CarEdge to buy their car with confidence. With trusted resources like the CarEdge Research Center, Vehicle Rankings and Reviews, and hundreds of guides on YouTube, CarEdge is redefining transparency and fairness in the automotive industry. Follow us on YouTube, TikTok, X, Facebook, and Instagram for actionable car-buying tips and market insights.Contact for Media Inquiries: press@caredge.com | www.CarEdge.com
Negative equity, or owing more on a car loan than the vehicle’s market value, continues to rise as inflationary pressures and long loan terms take their toll on car buyers. CarEdge, in partnership with Black Book, surveyed 474 drivers in Q4 2024 to uncover the state of vehicle equity. Here are the highlights and the broader implications for drivers, car buyers, and the automotive industry.
In Q4 2024, 39% of drivers who financed their vehicles were underwater—up from 31% in Q3, a 25% jump. For cars purchased since 2022, the situation is even worse: 44% of these buyers owe more than their car is worth. As depreciation accelerates and long-term loans become the norm, the risk of negative equity continues to grow. This trend highlights a troubling financial burden on drivers and poses risks for the broader auto market.
Drivers Overestimate Their Car’s Value
Our survey reveals that 60% of drivers believe their car is worth more than its actual trade-in value. Of these, 18% overestimate by $5,000 or more, and 7% by over $10,000. This disconnect leads many to carry negative equity into their next car purchase, perpetuating financial strain.
When drivers attempt to trade in or sell their vehicles, they often face the harsh reality of lower-than-expected offers, which can derail their car-buying plans. Unfortunately, many choose to roll over the remaining debt into their next loan. This practice, while common, leads to higher monthly payments and extended loan terms, keeping buyers in a cycle of financial vulnerability.
Long Loan Terms Drive Negative Equity
Loan terms significantly impact vehicle equity. Borrowers with 84-month loans face a median negative equity of -$8,485, while those with shorter 36-month terms have a positive median equity of $7,783. While longer loans make monthly payments more affordable, they also leave buyers trapped in equity-negative positions for years.
For many buyers, the appeal of lower monthly payments outweighs the long-term risks. However, as loan balances decrease more slowly with longer terms, these borrowers are more likely to face financial strain when attempting to sell or trade in their vehicles. Buyers who opt for shorter terms and make larger down payments tend to build equity more quickly, putting them in stronger financial positions.
EV Owners Are Most at Risk
Electric vehicle owners face the highest negative equity rates, with 54% underwater and a median equity of -$2,345. This makes EVs particularly vulnerable compared to gas and hybrid vehicles, which are more likely to have positive equity.
The rapid depreciation of EVs is a key driver of this trend. EV technology can become outdated quickly as newer models with improved range, charging speeds, and driver assistance features enter the market. Additionally, concerns about costly battery replacements and limited resale demand have led many buyers to prefer new EVs with warranties and a known history, further impacting the resale value of used EVs.
For EV buyers, understanding depreciation trends and factoring in long-term costs is critical to avoiding significant negative equity. Opting for shorter loan terms and considering potential incentives or tax credits can help offset some of the financial risks. Buyers who plan to hold on to their EVs for longer than just a few years are less likely to be impacted by negative equity with their auto loans.
What Does This Mean for 2025?
As we head into 2025, the issue of negative equity looms large for both consumers and the auto industry. For car buyers, rolling over negative equity into new loans can lead to long-term financial stress, reducing their purchasing power and limiting options. For the auto industry, high levels of negative equity could dampen trade-ins and slow new car sales, forcing automakers and dealerships to adjust their strategies.
Car dealers also face challenges when appraising trade-ins with negative equity. To close deals, dealers may need to discount new vehicles more aggressively or offer creative financing solutions, which can erode profit margins. Over time, high levels of negative equity in the market can disrupt the typical sales cycle
Navigating the Negative Equity Challenge
The Q4 2024 Negative Equity Report paints a clear picture of a growing issue in the car market. Drivers, car buyers, and the auto industry alike must address the challenges posed by rising negative equity.
CarEdge remains committed to empowering consumers with tools and insights to navigate today’s challenging car market. To avoid falling into the negative equity trap, car buyers should prioritize shorter loan terms, be familiar with expected car depreciation, and monitor used car values with tools like Black Book. Overcoming negative equity is possible when drivers make informed car buying and ownership decisions.
The latest CarEdge Car Buyer Satisfaction Survey shows that an informed approach to car buying leads to a more satisfying and seamless experience, with 87% of respondents reporting high satisfaction with their purchases. This is significantly higher than industry averages and highlights the importance of buyer empowerment. From pricing expectations to dealership loyalty and specific aspects like trade-ins and add-ons, this report uncovers the ways that knowledge and preparation enhance the car-buying experience for consumers. These findings also reveal opportunities for the automotive industry to earn lasting customer loyalty.
Among 500 CarEdge Community members surveyed in October 2024, 87% reported being either “satisfied” or “very satisfied” with their vehicle purchase experience, far exceeding the 69% satisfaction rate reported by Cox Automotive’s latest industry survey. This higher satisfaction reflects the value of a well-informed buyer: 82% of CarEdge respondents felt fully prepared with the information needed to make an informed purchase decision.
The CarEdge Community’s sense of empowerment shows how buyer education can significantly impact satisfaction. Entering the dealership with an understanding of market conditions and financing options allows buyers to avoid common pitfalls, leading to more favorable interactions with dealers and less buyer’s remorse.
Price Expectations: Fewer Buyers Met With Sticker Shock
Price expectations play a crucial role in satisfaction. Among CarEdge survey respondents:
49% reported paying exactly what they expected.
15% managed to pay less than expected.
32% paid slightly more than expected, lower than the 49% reported in Cox Automotive’s broader survey.
These results highlight how empowered buyers with transparent price expectations experience fewer surprises when it comes time to finalize the deal. Transparent, data-driven resources bridge the expectation gap, enabling more accurate price forecasting and helping buyers secure deals with greater confidence.
BMW, Ram, and GMC Buyers Have the Most Dealership Loyalty
The CarEdge Car Buyer Satisfaction Survey revealed that dealership experiences play a pivotal role in fostering brand loyalty, with some car brands emerging as clear leaders in inspiring repeat business. Among the survey’s findings, BMW, Ram, and GMC ranked highest for dealership return rates, with more than three quarters of buyers indicating they would return to the same dealership for their next vehicle. This level of loyalty highlights a strong sense of trust and satisfaction among buyers of these brands, reflecting positively on dealership practices.
In contrast, brands with lower return rates underscore the importance of positive dealership interactions. Ford, Chevrolet, and Cadillac saw the lowest return intentions among survey respondents, with just one quarter of buyers expressing interest in purchasing from the same dealership again. These findings suggest that experiences such as transparency and pressure-free interactions play a major role in shaping loyalty
Dealership Loyalty: Room For Improvement
The dealership experience remains central to car buyer satisfaction. CarEdge’s survey reveals that:
69% would recommend their dealership to friends and family.
60% would consider returning to the same dealership for a future purchase.
17% reported they would not return to the same dealership.
While satisfaction levels with dealerships are high, a significant proportion of buyers remain cautious. This finding suggests that while most dealerships succeed in delivering positive experiences, more could be done to foster long-term loyalty by improving transparency, maintaining honest communication, and minimizing high-pressure tactics.
Persistent Pain Points: Trade-Ins and Add-Ons
While satisfaction with the overall car-buying experience is high, certain areas continue to cause buyer frustration:
Trade-Ins: Among the 222 respondents who traded in a vehicle, 20% reported dissatisfaction with the process, highlighting the need for fairer trade-in valuations.
Warranty and Service Packages: 14% of respondents reported dissatisfaction with warranty and service offerings, citing unclear terms or high costs as the primary issues.
Add-On Services: 20% of respondents felt pressured into purchasing add-ons such as extended warranties or accessories, with 13% reporting unclear pricing on these items.
Improving transparency in these areas would lead to better buyer experiences, as customers feel less pressured and more in control of the transaction.
EV Buyers Are More Satisfied with Their Purchase
The CarEdge survey also revealed that satisfaction varies by powertrain. Among all respondents, 5.5% had purchased an electric vehicle (EV), and EV buyers reported a higher overall satisfaction score of 4.7 compared to 4.4 for internal combustion engine (ICE) vehicles.
Notably, 48% of EV buyers had purchased Tesla models, and 76% bought new EVs rather than used. The data suggests that EV buyers, especially those opting for new models, are generally more satisfied with their purchase experience.
Conclusion: Empowered Buyers are Satisfied Buyers
The findings from the CarEdge Car Buyer Satisfaction Survey highlight the positive impact of a well-informed car-buying approach. Buyers who are equipped with clear expectations and market insights experience smoother transactions, greater pricing transparency, and higher satisfaction. This trend is beneficial for car buyers, dealerships, and the broader auto industry as transparency fosters trust and strengthens relationships.
Car buying can be overwhelming, but Deal School is here to help. CarEdge, led by father-son duo Ray and Zach Shefska, has updated the internet’s #1 free car buying course for 2024 and beyond. Designed to empower consumers, Deal School teaches buyers how to navigate the car buying process with confidence, saving money in the process.
Deal School consists of four comprehensive units made up of 22 individual lessons, each designed to prepare you for every step of your car buying journey. Here’s a breakdown of what you’ll learn:
Finding Your Vehicle: Discover how to assess your needs, set a realistic budget, and choose the perfect new or used car.
Getting Ready for the Dealership: Get expert advice on what to research and bring to the dealership to set yourself up for success.
How to Negotiate Your Car Deal: Unlock strategies to negotiate like a pro, whether you’re leasing, trading in, or buying.
Navigating the Finance and Insurance Office: Learn how to avoid costly mistakes by understanding financing options and F&I products.
Each unit concludes with a quiz to test your knowledge and ensure you’re ready for real-life negotiations. With CarEdge’s Deal School, the car buying process is not only simplified, but consumers also gain the confidence to negotiate smarter deals, keeping more money in their pockets.
What’s New in Deal School?
In addition to refreshed lessons with updated information and brand-new recorded lessons with Ray Shefska, Deal School 2024 introduces a free e-book filled with proven strategies to help you get the best deal on your next ride. This e-book is packed with insider knowledge, giving you a major advantage before stepping foot in a dealership. Print it off, take it with you, and shop for your next car with confidence.
Learn Car Buying Like a Pro
CarEdge’s Deal School is the go-to resource for anyone looking to buy a car with confidence. You’ll learn everything from car-buying secrets to mastering the art of negotiation and understanding financing. Once you complete the course, you’ll be ready to secure the best deal on your next vehicle purchase.
Negative equity, or being “underwater” on a car loan, is becoming a growing issue for many drivers in today’s market. As vehicle prices soar and depreciation accelerates, more car owners are finding themselves owing more on their loans than their cars are worth. CarEdge, in partnership with Black Book, surveyed nearly 1,000 drivers to understand the extent of this problem in Q3 2024. Here are the key findings.
According to our survey, 31% of drivers who financed their vehicles are currently in negative equity. This number rises to 39% for vehicles purchased since 2022, indicating that newer car buyers are especially vulnerable. As vehicle prices increase and long loan terms become more common, the risk of being underwater is higher than ever.
Most Drivers Overestimate Their Vehicle’s Value
A staggering 61% of surveyed drivers overestimate how much their cars are worth, with 17% believing their vehicle is worth at least $5,000 more than its true trade-in value. This disconnect can lead to unpleasant surprises when drivers try to trade in or sell their cars, often rolling over negative equity into their next auto loan and perpetuating the cycle.
Longer Loan Terms Lead to Greater Negative Equity
Our data shows that loan terms directly impact vehicle equity. Car owners with 84-month loan terms are nearly $5,000 underwater on average, while those with 36-month loans typically have $12,340 in equity. Although longer loans reduce monthly payments, they also increase the likelihood of negative equity in the long term.
EV and Luxury Car Owners Are Hit Hardest
Electric vehicle owners are significantly more likely to be underwater. Of the EV owners we surveyed, 46% are currently in negative equity, with a median loan-to-value (LTV) ratio of 0.94—higher than the broader market’s 0.73. Luxury car brands like Tesla and BMW also see higher rates of negative equity compared to budget brands like Toyota and Honda.
A Concerning Trend for 2025
As more drivers find themselves underwater on their car loans, the negative equity issue is poised to become a major challenge for car owners and the auto industry alike. While budget car buyers may fare better, EV and luxury car owners are disproportionately affected.
CarEdge remains committed to providing insights and tools to help consumers navigate today’s car market. To learn more about vehicle equity and stay informed on auto news and market trends, visit CarEdge for expert analysis and guidance. For more information about Black Book’s industry-leading data and analytics, visit BlackBook.com.
Navigating the current car market can be a daunting task, with its varying inventory levels and volatile prices. In this context, knowledge truly is power. A critical piece of this knowledge is understanding the Market Day Supply (MDS).
MDS is a measure of the number of days it would take to sell all of a particular model of car, based on the current sales rate, assuming no additional inventory is added. A high MDS suggests an oversupply, potentially giving buyers leverage for negotiation, while a low MDS might indicate a seller’s market, where negotiating could prove tougher.
Using CarEdge Insights, we identified which new cars have the most and least inventory available in May 2025.
Why does inventory matter to car buyers?
Inventory influences negotiability. When there’s a glut of cars, dealers will be more inclined to negotiate with you. Slim pickings? Not so much. This valuable insight can give you an edge in your car buying journey, helping you save money and avoid the hassle.
Here are the fastest and slowest-selling cars and trucks in America right now.
The Top 10 in May 2025: New Cars With the Highest Inventory
This month, a wide range of makes and models are represented in the top 10. For the first time in a year, Stellantis has no models in the top 10. This is great news for them, and bad news for their competitors. The Jaguar F-PACE luxury SUV remains in the top spot as high interest rates hamper luxury sales. With high depreciation, high fuel costs, and questionable reliability, the F-PACE has a D- CarEdge Value Rating.
A few electric crossovers join the top 10 in May: the Volkswagen ID.4 and the Ford Mustang Mach-E. Sales for these two models have steadily declined as more competition enters the segment. For example, sales of EVs from Chevrolet and Hyundai are rising right now.
The average selling price for the 10 slowest-selling cars is $73,638 in May 2025, a large spike due to the presence of the Porsche Taycan on the list.
Here are the 10 slowest-selling new cars, in other words, the models with the most inventory today.
There’s BIG potential for deals on any of these cars, but only withnegotiation know-how.
The Bottom 10 in May 2025: New Cars With the Lowest Inventory
On the other side of the coin, these are the fastest-selling cars today. This month, we’re seeing the usual suspects on the list, plus a flood of luxury models. Once again, Toyota Motors dominates with the Lexus RX Hybrid as the fastest-selling car in America. Seven of the ten fastest-selling new cars are Toyota or Lexus models. Yet, Toyota remains a brand known for relatively fair and transparent pricing.
With multiple Lexus models, an Audi, and a BMW on the list, some mainstream luxury vehicles are doing quite well right now. Although this is great news for automakers who are thrilled to sell high-margin models, it’s bad news for buyers looking to negotiate.
If you’re shopping for any of these new cars in 2025, you’ll be up against stiff competition. The average selling price for the 10 fastest-selling cars is $57,919.
In May, this is the largest price gap between the fastest and slowest selling cars that we’ve ever seen. Even without the Taycan on the slowest-selling rankings, there would still be a $8,000 difference between the fastest and slowest selling cars.
Ready to outsmart the dealerships? Download your 100% freecar buying cheat sheets today. From negotiating a deal to leasing a car the smart way, it’s all available for instant download.
