Americans are facing an alarming trend when it comes to car debt. According to a recent report, car debt is piling up as more Americans owe thousands more than their vehicles are worth. This is a concerning trend, as it can have significant financial consequences for those who are struggling to make ends meet.
The report suggests that the increase in car debt is partly due to rising car prices. As new cars become more expensive, many people are opting for used cars, which often have higher interest rates. In addition, people are taking out longer loans, which means they are paying more in interest over time. This can lead to a situation where the car is worth less than the amount owed, which is known as being "upside down" on the loan.
Being upside down on a car loan can have serious consequences. If the car is totaled in an accident, the insurance payout may not cover the remaining balance on the loan. This means the borrower will still owe money on a car they no longer have. In addition, being upside down on a car loan can make it difficult to sell the car or trade it in for a new one.
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