Montana Vehicles Might Be Worth Less Than You Think

Great Falls has a large number of used vehicle lots especially on the East end of 10th Avenue south. Some vehicles when purchased used can dramatically change in value once they are driven off the lot. While some people use Kelly Blue Book or NADA or other similar websites to see what a vehicle is worth before purchasing, some people just go off of what the dealership says the car is worth without doing their own research.

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According to a study done by CarEdge 1 in 3 drivers are upside down in their loan. Meaning that a vehicle was purchased and the vehicle is now worth less than the balance of the loan. It even has happened to me. I purchased a vehicle for $19,000 in January of 2024 and the vehicle is now worth $10,000 just 10 months later.

via GIPHY

According to CarEdge, over 30% of drivers who financed have underwater loans in 2024. More than half of the drivers that were surveyed overestimated their car's value.

This might have something to do with the higher interest rates when purchasing a vehicle new or used. A higher interest rate means paying more on the loan as the life of the loan goes on.

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Some Vehicles Depreciate Quicker Than Others

The report also says that some different vehicle Make's could be better off than others. Such as the value of a Honda or Toyota may be less likely to have a lower value.

A larger problem is when people decide to trade in their vehicle and roll over the negative equity into the new loan. This ends up creating more issues and more debt for the owner down the road.

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