According to the article, declining vehicle values have left many car owners with negative equity on their loans. This means that the value of their car is less than the amount of money they still owe on their loan. As a result, car owners may find themselves in a difficult financial situation if they need to sell their car or trade it in.
There are a few factors contributing to this trend. One major factor is the depreciation of vehicles over time, which can be particularly steep for new cars. Additionally, some car owners may have taken out loans with long terms or high interest rates, which can increase the likelihood of negative equity.
To avoid negative equity, car owners are advised to do their research before purchasing a car, including considering the depreciation rates of different models. It's also important to make a substantial down payment and choose a loan term that is manageable.
Overall, negative equity on car loans can be a challenging situation for car owners, but with careful planning and financial management, it is possible to avoid or mitigate the effects of declining vehicle values.
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