The Negative Equity Story: How We Got Here and Why It Matters

The Negative Equity Story: How We Got Here and Why It Matters

How did negative equity become one of the automotive industry's biggest affordability challenges, and what does it mean for consumers and dealers? In this episode of The Auto Market Brief, host Erin Keating is joined by Micah Tindor, AVP of Consumer Vehicle Disposal at Cox Automotive, to explore how negative equity became one of the industry's most significant affordability challenges and why its impact is likely to extend far beyond trade-in transactions. How the industry arrived at today's negative equity problem: Pandemic-era vehicle shortages, elevated transaction prices, higher interest rates, and longer loan terms lead to a growing number of consumers who are "upside down" on their vehicles. While negative equity itself is not new, the average amount consumers carry today has grown substantially, making it more difficult to absorb into the next purchase. https://coxautoinc-my.sharepoint.com/personal/burke_abbott_coxautoinc_com/_layouts/15/Doc.aspx?sourcedoc=%7B9D315A06-E2E0-4F34-B749-34CA0AEDF415%7D&file=SetupandTaggingGuide_AutoMarketBrief.docx&action=default&mobileredirect=true Why affordability pressures are compounding: Higher vehicle prices, increased financing costs, and rising insurance premiums are putting additional strain on household budgets. For many consumers, negative equity can mean higher monthly payments, longer loan terms, and greater challenges when attempting to replace or trade in a vehicle. https://coxautoinc-my.sharepoint.com/personal/burke_abbott_coxautoinc_com/_layouts/15/Doc.aspx?sourcedoc=%7B9D315A06-E2E0-4F34-B749-34CA0AEDF415%7D&file=SetupandTaggingGuide_AutoMarketBrief.docx&action=default&mobileredirect=true How dealers can help consumers navigate the challenge: As more buyers enter dealerships with underwater trade-ins, dealers have an opportunity to play a more consultative role. Leasing, lower-priced vehicle options, and financing flexibility can help consumers work through negative equity challenges. The discussion also examines the implications for used-vehicle acquisition, lender relationships, insurance costs, consumer sentiment, and the industry's ability to balance affordability with consumer demand in the years ahead. The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what's happening now, and what's coming next. The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at Cox Automotive Insights Hub [https://www.coxautoinc.com/insights].

Consumer Spending Caveats, USMCA Non-Renewal, and the EV Lease Residual Gap

Consumers are still spending, unemployment remains low, and auto sales continue to outperform expectations. But a closer look at the data reveals a more complicated story. In this episode of The Auto Market Brief, Erin Keating and Jeremy Robb unpack the latest economic indicators, from consumer spending and labor participation to trade negotiations and EV lease economics, to better understand what's really happening beneath the surface. In This Episode. Why strong consumer spending may not tell the whole story: Consumer spending continues to rise, but much of the growth is being driven by necessities while household expenses are increasing faster than income, creating ongoing affordability pressure. What labor market data is really signaling: Employment remains strong, but declining labor force participation raises important questions about the true strength of the workforce and where future growth will come from. How EV lease residuals are reshaping the market: Negative equity positions are becoming a growing concern for leased EVs, prompting automakers to explore new strategies to retain customers and keep vehicles out of wholesale channels. The discussion also covers USMCA renewal uncertainty, June sales performance, autonomous vehicle regulation, and the competitive pressures confronting global automakers. The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next. The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights [https://www.coxautoinc.com/insights].

The EV Head Fake: How Regulatory Push and Wasted Capital Transform the Industry

How did the industry's push toward EVs reshape product development, and what are the long-term consequences? In this special episode of The Auto Market Brief, host Erin Keating is joined by John Murphy, founder of Murphy Automotive Partners, to discuss findings from his newly released automotive product pipeline analysis and the concept he calls the "EV head fake". How EV investments disrupted the industry's product pipeline: Murphy explains how regulatory pressure, capital allocation decisions, and shifting market expectations led automakers to redirect resources toward EV programs, resulting in delayed or canceled vehicle programs and the lowest vehicle redesign rates seen in decades. Why product cadence still matters: As vehicle ownership cycles lengthen and affordability remains a challenge, automakers are facing a growing disconnect between aging product portfolios and rising vehicle prices, creating headwinds for sales growth and customer retention. Why hybrids may be a more permanent solution than many expected: The conversation explores the growing role of hybrids in the U.S. market, how they compare with EV adoption trends, and what increasing powertrain fragmentation means for automakers, suppliers, and dealers. https://coxautoinc-my.sharepoint.com/personal/burke_abbott_coxautoinc_com/Documents/Microsoft%20Copilot%20Chat%20Files/cox-automotives-studio-xqpeb_tamb-bonusep-johnmurph.txt The discussion also examines dealer profitability, brand survival, supplier relationships, and the importance of understanding the automotive industry as an interconnected ecosystem. The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next. The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights [https://www.coxautoinc.com/insights].

Gas Prices Are Falling. But Are Car Buyers Really Getting Relief?

Gas prices are finally coming down, but how much does that actually improve the total cost of buying and owning a vehicle? In this episode of The Auto Market Brief, Erin Keating and Jeremy Robb break down the latest economic signals shaping the market, from declining fuel costs and improving sentiment to the ongoing pressures tied to inflation, interest rates, and vehicle pricing. How much lower gas prices really help: Gas prices have fallen below $4 per gallon, providing some relief for consumers, but fuel is only one part of the overall cost equation. Why vehicle affordability remains under pressure: Even as fuel costs ease, elevated interest rates and higher vehicle prices continue to impact monthly payments and purchasing decisions. What the latest data says about market performance: New vehicle sales are holding stronger than expected, while used vehicle prices remain elevated, highlighting the ongoing tension between demand and affordability. The episode also explores key industry developments, including regulatory focus on pricing transparency, continued investment in autonomous technologies, and signals from subprime lending markets. The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next. The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights [https://www.coxautoinc.com/insights].

Rethinking Mobility and the Future of Transportation

How should we really think about mobility, and what does it mean for the future of transportation, ownership, and the automotive industry? In this episode of The Auto Market Brief, Erin Keating sits down with Joe George, President of Cox Automotive Mobility Solutions, for a conversation that explores the impacts of changes to mobility, from how goods move across the economy to how affordability, access, and technology are reshaping transportation overall: Why mobility is bigger than vehicle ownership: Joe shares a perspective shaped by decades in the industry, emphasizing that transportation is not just about vehicles, but about how both people and products move across the economy, and who ultimately pays for those miles. How affordability is changing transportation behavior: As costs rise, both consumers and companies are making decisions based on total cost, shifting how vehicles are used, owned, and integrated into everyday life. What technology enables, but doesn’t define: From autonomy to electrification, the conversation explores how technology is accelerating change, while reinforcing that the real question is how these innovations solve practical use cases and improve outcomes. The discussion also touches on fleet-driven economics, evolving business models, and what leaders should keep in mind as mobility continues to evolve across the industry. The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next. The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights [https://www.coxautoinc.com/insights].