Are More Trade-Ins Underwater in October 2026?

The short answer

Yes, more trade-ins are underwater this fall. J.D. Power and GlobalData project that 29.6% of trade-ins in October 2026 will carry negative equity, up 0.6 percentage points from a year ago (J.D. Power, Oct. 22, 2026). If you owe more than your car is worth, the offer you get on it matters more, not less.

What J.D. Power's October forecast says

You might think negative equity is a problem only for people with bad credit or long loans. J.D. Power's read points to timing instead. Thomas King, president of OEM solutions at J.D. Power, said many buyers returning to showrooms bought near the price peak several years ago, when inventory was scarce. Here are the forecast's main numbers:

• More underwater trades. 29.6% of October trade-ins are projected to have negative equity, up 0.6 points year over year.
• Payments at an October record. The average new-vehicle monthly payment is expected to rise 2.6% to $823, even as the average transaction price dips 0.1% to $46,329.
• Trade equity is part of the gap. J.D. Power says higher interest rates and lower trade-in equity are driving payments up, by raising both the amount financed and the cost of financing it.
• Rates moved up. The average new-vehicle loan rate is projected at 6.81%, up 19 basis points from a year ago.

These are national forecasts for the month, not Texas figures, and they don't tell you what your vehicle is worth.

Why the offer on your car matters more when you're underwater

Negative equity is the gap between your loan payoff and what a buyer will pay for the car. Every dollar more in the offer is a dollar less of that gap. As a hypothetical example only: if you owe $24,000 and one dealer offers $21,000, you're $3,000 short. A second offer of $22,500 cuts the gap in half.

That gap doesn't vanish when you trade. It usually gets paid off at the sale or added to your next loan. Our post on long-term loans and negative equity covers how rolling it over adds up.

What to do before you sell or trade

1. Get your exact payoff. Ask your lender for a payoff amount and how long it's good for. Our post on trade-in loan payoffs explains the timing.
2. Know how the lien gets cleared. If you still have a loan, read selling a car with a loan in Texas first.
3. Get more than one number. How competing offers work explains how several local dealerships can bid on the same vehicle.
4. Compare a trade with a straight sale. Trade-in vs. selling outright helps you see which one leaves you closer to even.

This article is general information based on a national monthly forecast. It isn't financial advice, and your numbers depend on your loan and your vehicle.

Bottom line

J.D. Power expects nearly 3 in 10 October trade-ins to be underwater. If yours is one of them, a stronger offer shrinks the gap you carry forward, so compare buyers before you sign.

Thinking about selling? Get competing offers. It's free to sellers, first responses typically come the same day (not guaranteed), and offers are confirmed after a physical appraisal.