According to new data from Edmunds, 26.6% of trade-ins toward new car purchases in Q2 2025 had negative equity, up from 26.1% in the first quarter. That is the highest level in four years, and it is hitting dealerships where it hurts—in the finance office.
When nearly one in four customers owe more on their vehicle than it is worth, that negative equity follows them right into the showroom. It shrinks down payments, limits financing options, and often leads to more deal delays and denials.
For many dealers, the result is the same: a buyer ready to purchase leaves empty-handed because of negative equity.
The ripple effect of negative equity
Trade-ins with negative equity mean customers have little or no money to put down on a new purchase. That creates several challenges:
- Tighter credit approvals: Lenders are more cautious about rolling over balances.
- Longer deal times: F&I spends more time chasing approvals and restructuring terms.
- Lost opportunities: Customers with good intent but poor equity positions walk away without buying.
Dealers cannot control used-car depreciation or loan balances, but they can control how they get paid.
How CrossCheck helps close the sale
CrossCheck gives dealerships the flexibility to accept checks safely and make deals happen that might otherwise fall through.
Our Multiple Check program allows buyers to write up to four checks on the date of sale, which are deposited over an agreed-upon period. This gives customers time to manage their funds while still making a larger down payment.
For the dealership, that larger down payment can make the difference between a loan approval and a lost sale. The dealer completes the sale, and every check is guaranteed by CrossCheck, even if one is returned unpaid.
Solutions designed for dealerships
CrossCheck’s Automotive Payment Solution is built to help dealers close more sales and reduce risk across every department. Whether it is a retail purchase, service payment, or parts sale, our programs protect the dealership from returned checks and improve cash flow.
Dealers can accept checks confidently knowing that every approved transaction is guaranteed by CrossCheck. From flexible payment options like Multiple Check to programs for service drives, parts counters, and home delivery, our solutions help dealerships create a seamless experience for their customers while keeping revenue secure.
Protecting profits in a shifting market
The rise in underwater trade-ins is a reminder that consumer debt continues to tighten its grip on the auto market. Dealers who rely only on traditional credit approvals will lose more sales as negative equity becomes the norm.
CrossCheck’s payment guarantee programs give dealers the control, flexibility, and confidence to close those sales safely while maintaining strong customer relationships and consistent revenue flow.
Negative equity may be out of your hands, but losing a sale does not have to be.
CrossCheck helps dealers sell more cars, protect every transaction, and keep deals moving forward, regardless of what your customers owe on their trade-in.
Keep deals moving forward with CrossCheck
Get your free copy of CrossCheck’s Automotive Payment Solution Guide and discover how flexible check programs can help you close more sales, reduce risk, and keep revenue flowing.
By downloading, a member of our team may follow up to see if you’d like to explore solutions tailored to your dealership. No pressure, just a conversation if you’re interested.