[00:01] number that I need you to sit with for a second. 100 million. That is how many Americans currently have an active auto loan right now. Not a mortgage, not a loan right now. Not a mortgage, not a student loan, a car loan. 100 million
[00:14] people and together, well, those people owe 1.66 trillion dollars for vehicles that are depreciating in driveways while the payment absolutely do not. And dealership is going to tell you. A massive, [snorts] documented, [music]
[00:28] data confirmed portion of those people are underwater, upside down, paying for cars that are worth less than they owe on it. And [snorts] it's getting worse every single quarter. I spent a ton of time in the data on this and I found
[00:41] that it's not a vibe. It's not a doom scroll. It's not a TikTok theory. [music] It is a very specific set of pressure points that are stacking on top actually matters to you whether you're buying, selling, trading, or just trying
[00:55] truck has a for sale sign on it after 18 months. And if you don't want a car loan this Fast & Furious inspired Mark V Supra or my Shelby GT350 plus $100,000
[01:07] it in the pinned first comment down below. Also, like, subscribe cuz we're trying to hit 2 million subscribers by the end of this year and [music] let's go. The pandemic bought everyone a time bomb. The timer just went off in 2021
[01:21] bomb. The timer just went off in 2021 and 2022, if you wanted a car, any car, you paid whatever the dealer wanted. Inventory was gone. Chip shortages was for Corollas and people bought those cars with pandemic era loans much in
[01:35] with long terms, high balances because the vehicles were priced at levels they had no business being at. Fast forward to right now, those people are trying to trade in and what they're finding is that the car they overpaid for is worth
[01:47] significantly less than what they still owe on it. The average new car price in owe on it. The average new car price in early 2026 is sitting around $49,000, about 30% higher than it was in February 2020. The loans didn't shrink with the
[02:00] values. They they aged. And now, roughly 30.9% of trade-ins currently carry negative equity. By this, meaning nearly one in three people walking into a dealership to trade their car in owes more than the car is worth. That's not a
[02:13] blip. That is the market digesting years of bad decisions all at once. And the average amount owed on underwater trade-ins hit a record $7,214 trade-ins hit a record $7,214 in Q4 2025. And 27% of those upside-down
[02:28] trade-ins carried at least $10,000 in negative equity, also an all-time high. So, stop what you're doing cuz I have one quick question. Yeah, would you rather take the Supra or the GT350? Your choice, twin turbo power or that 8,000
[02:42] choice, twin turbo power or that 8,000 RPM V8 plus cash. It takes 2 seconds to hit the pin comment and lock in 100 free entries right now. Good skill. >> No, it's not just that a lot of people are underwater, it's that the depth of
[02:54] the water is record-breaking. The $916 a month treadmill, here's where it turns from a stat into a story about real people. When you're upside-down on your car and you need a new one, you have two choices. Eat the loss or roll the
[03:07] negative equity into the next loan. Almost everyone rolls it because eating a $7,000 loss out of pocket is not something most people can do. Buyers who rolled negative equity into a new loan in Q4 2025 paid an average of $916 per
[03:22] month, $144 more than the industry average, and financed more than $11,000 above the typical new vehicle loan amount. $916 a month, that is not a car payment. That is a second rent in a bad city. And
[03:36] 90.2% of consumers rolling negative equity into a new loan are extending terms to 72 months or longer with 43% entering 84-month agreements. 7 years. You are financing a car for 7 years. A car that will be worth almost nothing in
[03:52] 7 years. And you're starting that 7-year loan already in the hole from the last one. This is a treadmill. You are running. You are sweating. You are technically moving. You are in the [music] exact same financial position
[04:05] except now you owe more and it compounds. Every time you roll negative equity forward, the next loan gets bigger, the payment gets higher, and the exit gets smaller. Delinquencies are now beating the Great Recession. This is the
[04:18] part that should make lenders sweat. The overall 60-plus day delinquency rate on auto loans hit 1.38% in Q1 2025, which actually exceeded the in Q1 2025, which actually exceeded the 1.33% peak from 2009, the Great
[04:32] Recession. Let that breathe. We are now past the benchmark that everyone used for years as the worst-case scenario for auto lending. We've crossed it. And subprime is where it gets genuinely alarming. Subprime auto loan
[04:44] delinquencies hit a record 6.6% in early 2025, the highest rate ever recorded since tracking began in 1994. 30 years of data, new record, and this isn't just a subprime problem anymore. Even super prime borrowers are showing
[04:59] cracks with severe stage delinquencies surging over 300% year-over-year, though absolute levels remain low. The stress is spreading up the credit ladder. That's not a subprime crisis. That's a consumer credit environment that is
[05:11] genuinely cracking. 3 million repossessions. Yes, 3 million. Cars aren't just going late, they're getting taken. By Q4 2025, more than 2.2 million vehicles had already been repossessed in the US with industry projections
[05:26] pointing to 2025 year-end totals exceeding 3 million, a level not seen Recession. To put that in context, repossessions collapsed to historic lows in 2020 and 2021.
[05:40] programs were keeping people current, lenders weren't repossessing anyone. The pandemic created this artificial floor where nobody lost their car, and then all that support went away, the payments
[05:52] went up, the values went down, and the dam broke. Loans originated in 2022 through 2024 carried higher vehicle prices, higher interest rates, longer terms, and thinner borrower equity. And as those loans aged, more rolled into
[06:06] recovery. This is not a fluke. This is the bill coming due. Tariffs just poured gasoline on it. And then just when the affordability picture couldn't get more complicated, tariffs showed up. In 2025, US auto tariffs added $30 billion in
[06:20] cost to the automotive industry, leading to a 10.4% increase in the average vehicle MSRP. Imported vehicles saw price hikes Imported vehicles saw price hikes ranging from $5,000 to $8,900 per
[06:33] vehicle, while domestic vehicles saw increases of $1,600 to $2,000 due to higher material and parts costs. And it's not just sticker price. Automakers got creative. Destination fees on 2026 models hit new
[06:47] highs, including $2,795 on most full-size GM and Ford trucks and SUVs. GM raised the destination fee on the Silverado 40% in a single year. That is not a tariff line item on the window sticker. That's just the price going up
[07:02] in a place most people aren't looking. Sales of vehicles priced at $25,000 or less have fallen by 78% in just five years. 78% The affordable end of the new car market has essentially been deleted, which means
[07:17] buyers who can't afford $50,000 vehicles, which is most people, are itself being pressured upward by the same dynamics. The split that makes this really dangerous. Here's the nuance that most of the doom content misses. This is
[07:32] not happening equally to everyone. The market has split into two completely different experiences. Over 60% of new car purchases are now by households with incomes over $100,000. Those buyers have strong credit, they
[07:45] qualify for the best rates, they have equity, and they can navigate this market fine. The market functions for them. But below that line, the picture are getting hit with record delinquencies, near prime buyers are
[07:59] getting squeezed by payments [music] they can barely make, and the middle, uh, the person with a decent job, decent credit, and a car they bought in 2021 for too much money, is trapped. They can't trade because they're upside down.
[08:12] They can't refinance because values dropped. They can't exit. They just stay When enough of those people break at the used car market with distressed inventory that drags used values down,
[08:27] everyone else, which makes it harder for them to trade, which slows new car sales, which makes dealers sit on inventory, which forces incentives, which makes automakers nervous. And around and around it goes, financed at
[08:41] 84 months. What this means, if you're watching this right now, if you're shopping new, the leverage is in the inventory. Current dealer inventory is sitting around 3 million units with 73 to 88 days supplies of that, well above
[08:56] the historic average of 60 to 70 days. Cars are sitting, that means dealers need to move, that means you have room. Find the models that have been on the lot longest. Hunt incentives specifically. Do not get hypnotized by
[09:08] the monthly payment Okay? Look at the total loan cost and the term. If someone's quoting you 84 months, that's a red flag, not a solution. So, what does this mean if you're watching this right now? Well, if you're shopping new,
[09:22] Current dealer inventory is sitting around 3 million units with 73 to 88 days of supply, and that is well above the historic average of 60 to 70 days. Cars are sitting, that means dealers need to move, that means that they have
[09:38] room. Find the model that has been on the lot the longest. Hunt incentives specifically. Don't get hypnotized by the monthly payment. Look at the total loan cost and the term. If someone's quoting you 84 months, then that's a red
[09:51] flag, not a situation. If you're thinking about trading in, check your equity situation before you check your feelings. Know what you owe. Know what it's worth. If you're underwater, bam. Understand exactly how much of that
[10:04] follow you into the next loan and the something clean and paid off, well, you're holding an asset in a market that is making assets harder to acquire every single quarter. That's not nothing. The
[10:17] car market this year isn't crashing like a movie. It's kind of grinding. It's a slow-motion squeeze where the exits are closing for the people who bought at the wrong time, with the wrong terms, at the wrong price. The crash isn't the moment
[10:31] everything drops. The crash is when millions of people realize that they can't move and the market freezes around them. That is exactly what's happening. subscribe, check out the pinned comment for entries to win this Mark V Supra,
[10:45] for entries to win this Mark V Supra, Shelby GT350, and $100,000 cash. I'm Brad Danger. This is Ideal. Check out some of these Ideal vids over here. And promise me one thing. Keep living the Ideal lifestyle.