My Ford F-150 Has Lost So Much Value, $20K In Negative Equity Since Ford Decided to Tank the Brand Due to Reliability and Cutting Corners

Negative equity is rising.

You aren't alone if you are underwater and in the red with negative equity in your Ford F-150 pickup or SUV. The average trade-in during the third quarter of 2024 carried an all-time record amount of negative equity, with the borrower underwater by an average of $6,458, up 11 percent from a year earlier, according to Edmunds.

"It's easy to assume that only specific consumers trading in higher-ticket luxury vehicles are the ones underwater on their car loans, but the reality is that this is a problem across the board," Ivan Drury, Edmunds' director of insights, said in a statement.

This Ford-F-150 owner is $20,000 in the red. 

Reddit user Designer_Junket_9347 says he has a Ford F-150 that he overpaid for the truck ($70,000). He has a 3.85% rate and a $1080 payment for 75 months financed with a credit union. His F-150 now has 58,841 miles on it. 

He wants to trade it in, but he's probably stuck with the F-150 for quite a while. Here is his story.

He says, "My F-150 has lost so much value (~$20,000 in negative equity) since Ford has decided to tank the brand due to reliability and cutting corners during the pandemic. I really want to buy a house soon, but my monthly payment of $1080 is killing my DTI." (debt-to-income). 

"Other than giving it back to the bank and saying 'the hell with it,' are there any other options?" 

"I'm living paycheck to paycheck and eating as cheaply as I can already. So, paying more every month isn't an option. It was a great decision at the time to buy the truck because I was full-time RV'ing, but I don't need the truck anymore and tired of the mortgage payment on it." 

"Can I trade into a lease on a cheaper vehicle? Or finance another car. I think I'm over the 125%, though."

This Ford F-150 truck owner is among many truck and SUV owners in the red in equity. 

"Twenty-four percent of trade-ins used for new-vehicle purchases were underwater, up from 19 percent a year earlier though lower than the 34 percent in the pre-pandemic third quarter of 2019," Edmunds said.

A report from Automotive News says midsize SUVs made up 20 percent of the trade-ins with negative equity, 17 percent of the underwater vehicles were compact SUVs, and 10 percent of the negative-equity models were trucks, according to Edmunds.

The report said 22 percent of buyers with negative equity were more than $10,000 underwater on their existing auto loan, and 7.5 percent of consumers with trade-ins were more than $15,000 in the red.

"Consumers owing a grand or two more than their cars are worth isn't the end of the world, but seeing such a notable share of individuals affected at the $10,000 or even $15,000 level is nothing short of alarming," Edmunds head of insights Jessica Caldwell said in a statement. 

"A combination of uncontrollable market factors and misguided consumer financial decisions are contributing to the rise of this troubling trend."

The Ford F-150 owner likely paid too much for the truck two years ago when inventory levels were low, and prices were at their highest. He also took out a 75-month loan.  

Caldwell said the problem stems from consumers paying more than the sticker price on vehicles in the past and falling trade-in prices today as automaker incentives return. She said customers have also accepted long loan terms and trading vehicles "earlier than is financially prudent."

It's important to remember that there is now a record number of trade-ins underwater and in red, and you're not alone in facing this challenge. 

The average amount of negative equity found on trade-ins for new vehicles reached an all-time high during the 3rd quarter of 2024.

The average negative equity for the past six years. 

• Q3 2024 (-$6,458)
• Q3 2023 (-$5,808)
• Q3 2022 (-$4,894)
• Q3 2021 (-$4,200)
• Q3 2020 (-$4,964)
• Q3 2019 (-$5,251)

Dan Clara, senior vice president of operations at Asbury Automotive Group Inc., one of the nation's largest dealership groups, said during a third-quarter earnings call on October 29 that Asbury was "definitely seeing our fair share of consumers that are in a negative equity situation.”

Clara said Asbury encountered negative-equity consumers more frequently with domestic trade-ins, but the issue arose in luxury and imported models too.

"Negative equity requires, in many cases, more money down ... to offset some of that," Clara said. "So definitely a slight concern as we move forward."

What should truck and SUV owners do if they have negative equity?

The FTC Consumer Advice says, "If you think your trade-in has negative equity, find out what your current vehicle is worth before you negotiate the purchase of a new car. Check the National Automobile Dealers Association's (NADA) Guides, Edmunds, and Kelley Blue Book."

They give this advice if you have negative equity.

• One option is to wait to buy another car until you have positive equity in the one you're still paying for. For example, consider paying down your loan faster by making additional principal-only payments. 
• Another solution is to sell your car yourself. You might get more for it than what a dealer says it's worth.
• Ask the dealer how they'll handle negative equity if you decide to go ahead with a trade-in. Read the contract carefully. Make sure any oral promises are included. Only sign the contract once you understand all the terms, the amount of your monthly payment, and what's included.
• Negotiate your new loan for the shortest amount of time you can afford, especially if the negative equity amount is rolled into the new loan. The longer your loan term, the longer it will take to reach positive equity in your new car — and the more you'll pay in interest.

The Ford F-150 owner is among many truck and SUV owners in the red with their vehicles. While there are no easy answers, being cautious and informed in your future decisions can help navigate this issue. 

It's Your Turn.

Do you have negative equity in your vehicle? Which truck or SUV do you own? If so, click the red Add New Comment link below and let us know.

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I am Denis Flierl, a Senior Torque News Reporter since 2012. My 30+ year tenure in the automotive industry, initially in a consulting role with every major car brand and later as a freelance journalist test-driving new vehicles, has equipped me with a wealth of knowledge. I specialize in reporting the latest automotive news and providing expert analysis on Subaru, which you'll find here, ensuring that you, as a reader, are always well-informed and up-to-date. Follow me on my X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.

Photo credit: Denis Flierl via Ford