Negative equity and shifting market dynamics are shaping dealer strategy in 2026, according to Jessica Caldwell, AVP of Insights at Edmunds, on this episode of Inside Automotive. While the share of trade-ins with negative equity isn’t at record highs, the average amount now exceeds $7,000—creating new pressures for lenders, dealers, and consumers.
Caldwell explains how elevated transaction prices during the microchip shortage continue to impact loan structures and affordability. As lenders evaluate how much negative equity they are willing to finance, dealerships may need to adjust inventory, pricing conversations, and customer education strategies.
- Why average negative equity has reached historic highs
- How lender limits could influence approvals and sales volume
- The shift toward used vehicles and higher-mileage trade retention
- Growth in certified pre-owned and lease returns in 2026
- Stabilizing pricing and days-to-turn metrics signaling market balance
As affordability concerns persist, dealers must navigate inventory mix, consumer expectations, and financing realities to sustain profitability.
Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.
For more content, visit CBTNews.com and follow us on your favorite podcast platform.