Rising Negative Equity Among New Car Buyers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 30 2026
0mins
Should l Buy CVNA?
Source: CNBC
- Rising Negative Equity: According to J.D. Power, 30.5% of new car buyers are facing negative equity on trade-ins, up 4.2 percentage points from last year, indicating increasing market pressures that affect consumer purchasing decisions.
- Record High Debt Levels: As of Q4 2025, the average amount owed on underwater trade-ins reached $7,214, a record high, with 27% of these trade-ins carrying over $10,000 in negative equity, reflecting a deterioration in consumer financial health.
- Increased Payment Burden: The average monthly payment for buyers rolling negative equity into new loans hit $916, which is $144 higher than the average payment for all new car purchases, indicating greater financial strain on consumers when buying vehicles.
- Extended Loan Terms Trend: Among new car purchases involving negative equity, 40.7% are financed with 84-month loans, suggesting that consumers are extending loan terms to cope with high vehicle prices, thereby increasing future negative equity risks.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy CVNA?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on CVNA
Wall Street analysts forecast CVNA stock price to rise
18 Analyst Rating
16 Buy
2 Hold
0 Sell
Strong Buy
Current: 376.550
Low
395.00
Averages
497.94
High
550.00
Current: 376.550
Low
395.00
Averages
497.94
High
550.00
About CVNA
Carvana Co. is a holding company. The Company operates an e-commerce platform for buying and selling used cars. The Company primarily acquires used vehicle inventory directly from customers, used car auctions, and wholesale used vehicle suppliers, including retail marketplace partners. Once it acquires a vehicle, the Company leverages its in-house logistics network or a vendor to transport the vehicle to one of its inspection and reconditioning centers (IRC) or auction locations with reconditioning capabilities, at which point the vehicle enters its inventory management system. The Company offers a mobile-optimized Website, where prospective retail car buyers can immediately begin browsing, researching, filtering, and identifying their vehicle of choice, where it offers an annotated virtual vehicle tour, which includes a 360-degree view of the interior and exterior of the actual vehicle. The Company also offers integrated financing using its loan origination platform.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Michael Burry Sells Entire GameStop Stake Due to Acquisition Risks
- Investment Decision Shift: Michael Burry announced on his Substack that he sold his entire GameStop stake due to the company's acquisition proposal for eBay, which he believes undermines his investment thesis, particularly with a debt-to-EBITDA ratio exceeding 5x, indicating his concerns over high leverage.
- Acquisition Proposal Details: GameStop made an unsolicited offer to acquire eBay for $125 per share in cash and stock, valuing the online marketplace at approximately $55.5 billion; however, the feasibility of financing this deal has raised significant market skepticism despite the substantial premium over recent trading levels.
- Market Reaction: Following the acquisition announcement, GameStop's shares fell about 10%, reflecting investor doubts regarding the deal's viability and concerns over the company's financial health, with its market capitalization nearing $12 billion.
- Financial Structure Risks: Burry highlighted that if the acquisition were to proceed at the proposed valuation, GameStop's leverage could rise to approximately 7.7 times, bordering on distressed levels, and he referenced companies like Wayfair and Carvana that have struggled under similar debt burdens, emphasizing the risks associated with high leverage.
See More
Carvana (CVNA.US) Officer Plans to Sell $3.96 Million in Common Stock via Form 144
Stock Sale Announcement: BHJ C Trust intends to sell 10,000 shares of Carvana (CVNA.U.S) on May 1, with an estimated market value of approximately $3.96 million.
Reduction in Shareholding: Since February 2, 2026, BHJ C Trust has reduced its shareholding in Carvana by 30,000 shares, valued at around $10.44 million.
See More
Carvana (CVNA.US) Officer Plans to Sell $5.05 Million in Common Stock via Form 144
Stock Sale Announcement: Mark Jenkins, an officer at Carvana (CVNA.U.S), plans to sell 12,750 shares of the company's common stock on May 1, with an estimated market value of approximately $5.05 million.
Reduction in Shareholding: Jenkins has reduced his shareholding in Carvana by 38,250 shares since February 2, 2026, with a total value of around $13.31 million.
See More
Growth Investment Opportunities Amid Market Volatility
- Carvana Earnings Highlights: Carvana reported a 58% year-over-year revenue growth in Q4, reaching $5.6 billion, although its EBITDA of $511 million fell short of the expected $535.7 million, indicating strong revenue growth potential despite high cost pressures.
- Block Stock Analysis: While Block's stock has stagnated since its pandemic peak, analysts overwhelmingly rate it as a strong buy, with a 12-month price target of $87.27, suggesting a 25% upside from current levels, reflecting confidence in its future growth.
- WM's Market Position: Waste Management holds a significant position in the U.S. waste management market with over 260 landfills and 500 transfer facilities, and as waste generation continues to rise, the company is poised to benefit from increasing demand.
- Long-term Investment Returns: WM has outperformed the S&P 500 over the past decade, and despite recent spending pressures from its entry into the medical waste sector, its 23 consecutive years of per-share dividend growth and ongoing stock buybacks provide a stable return outlook for investors.
See More
Mixed Earnings Reports from Multiple Companies
- Willis Towers Watson's Weak Performance: The insurer reported only 3% organic revenue growth in Q1, falling short of the 4.8% market expectation, leading to a 12% drop in stock price, despite adjusted earnings exceeding Wall Street forecasts, indicating potential growth challenges ahead.
- Hertz Partners with Uber: Hertz's stock surged about 18% following the announcement of a partnership with Uber, where its new Oro Mobility unit will support Uber's robotaxi initiative, with services expected to launch in the San Francisco Bay area later this year, marking a strategic move into autonomous driving.
- Altria's Earnings Beat Expectations: Altria reported adjusted earnings of $1.32 per share in Q1, surpassing the $1.25 consensus estimate, resulting in a stock increase of over 5%, while reaffirming its full-year adjusted earnings guidance, showcasing stability in the tobacco sector.
- Carrier Global's Strong Results: Carrier Global's Q1 adjusted earnings reached 57 cents, exceeding the expected 51 cents, with revenue of $5.34 billion surpassing the $5.01 billion consensus, leading to an 11% stock increase, reflecting robust performance in the building and refrigeration markets.
See More
Google Cloud Revenue Surges 63% Exceeding Expectations
- Impressive Revenue Growth: Google Cloud's revenue surged 63% year-over-year to $20.03 billion, surpassing market expectations of $18.05 billion, demonstrating strong performance in the cloud infrastructure market amid soaring AI demand.
- AI-Driven Growth: For the first time, Google's enterprise AI solutions became the primary growth driver for its cloud business, with revenue from products built on Google generative AI models skyrocketing by 800%, indicating a significant enhancement in the company's competitiveness in the AI sector.
- Intensifying Market Competition: Despite Google Cloud's standout performance, Amazon AWS and Microsoft Azure also reported revenue growth of 28% and 40%, respectively, highlighting the intensifying competition in the cloud market, with all three giants expecting nearly $600 billion in capital expenditures this year.
- Emerging Competitors: Smaller neo-cloud providers like CoreWeave and Nebius have captured 5% of the market share, further intensifying competition and prompting major cloud service providers to accelerate innovation and investment to maintain their market leadership.
See More
Michael Burry Sells Entire GameStop Stake Due to Acquisition Risks
- Investment Decision Shift: Michael Burry announced on his Substack that he sold his entire GameStop stake due to the company's acquisition proposal for eBay, which he believes undermines his investment thesis, particularly with a debt-to-EBITDA ratio exceeding 5x, indicating his concerns over high leverage.
- Acquisition Proposal Details: GameStop made an unsolicited offer to acquire eBay for $125 per share in cash and stock, valuing the online marketplace at approximately $55.5 billion; however, the feasibility of financing this deal has raised significant market skepticism despite the substantial premium over recent trading levels.
- Market Reaction: Following the acquisition announcement, GameStop's shares fell about 10%, reflecting investor doubts regarding the deal's viability and concerns over the company's financial health, with its market capitalization nearing $12 billion.
- Financial Structure Risks: Burry highlighted that if the acquisition were to proceed at the proposed valuation, GameStop's leverage could rise to approximately 7.7 times, bordering on distressed levels, and he referenced companies like Wayfair and Carvana that have struggled under similar debt burdens, emphasizing the risks associated with high leverage.
See More
Carvana (CVNA.US) Officer Plans to Sell $3.96 Million in Common Stock via Form 144
Stock Sale Announcement: BHJ C Trust intends to sell 10,000 shares of Carvana (CVNA.U.S) on May 1, with an estimated market value of approximately $3.96 million.
Reduction in Shareholding: Since February 2, 2026, BHJ C Trust has reduced its shareholding in Carvana by 30,000 shares, valued at around $10.44 million.
See More
Carvana (CVNA.US) Officer Plans to Sell $5.05 Million in Common Stock via Form 144
Stock Sale Announcement: Mark Jenkins, an officer at Carvana (CVNA.U.S), plans to sell 12,750 shares of the company's common stock on May 1, with an estimated market value of approximately $5.05 million.
Reduction in Shareholding: Jenkins has reduced his shareholding in Carvana by 38,250 shares since February 2, 2026, with a total value of around $13.31 million.
See More
Growth Investment Opportunities Amid Market Volatility
- Carvana Earnings Highlights: Carvana reported a 58% year-over-year revenue growth in Q4, reaching $5.6 billion, although its EBITDA of $511 million fell short of the expected $535.7 million, indicating strong revenue growth potential despite high cost pressures.
- Block Stock Analysis: While Block's stock has stagnated since its pandemic peak, analysts overwhelmingly rate it as a strong buy, with a 12-month price target of $87.27, suggesting a 25% upside from current levels, reflecting confidence in its future growth.
- WM's Market Position: Waste Management holds a significant position in the U.S. waste management market with over 260 landfills and 500 transfer facilities, and as waste generation continues to rise, the company is poised to benefit from increasing demand.
- Long-term Investment Returns: WM has outperformed the S&P 500 over the past decade, and despite recent spending pressures from its entry into the medical waste sector, its 23 consecutive years of per-share dividend growth and ongoing stock buybacks provide a stable return outlook for investors.
See More
Mixed Earnings Reports from Multiple Companies
- Willis Towers Watson's Weak Performance: The insurer reported only 3% organic revenue growth in Q1, falling short of the 4.8% market expectation, leading to a 12% drop in stock price, despite adjusted earnings exceeding Wall Street forecasts, indicating potential growth challenges ahead.
- Hertz Partners with Uber: Hertz's stock surged about 18% following the announcement of a partnership with Uber, where its new Oro Mobility unit will support Uber's robotaxi initiative, with services expected to launch in the San Francisco Bay area later this year, marking a strategic move into autonomous driving.
- Altria's Earnings Beat Expectations: Altria reported adjusted earnings of $1.32 per share in Q1, surpassing the $1.25 consensus estimate, resulting in a stock increase of over 5%, while reaffirming its full-year adjusted earnings guidance, showcasing stability in the tobacco sector.
- Carrier Global's Strong Results: Carrier Global's Q1 adjusted earnings reached 57 cents, exceeding the expected 51 cents, with revenue of $5.34 billion surpassing the $5.01 billion consensus, leading to an 11% stock increase, reflecting robust performance in the building and refrigeration markets.
See More
Google Cloud Revenue Surges 63% Exceeding Expectations
- Impressive Revenue Growth: Google Cloud's revenue surged 63% year-over-year to $20.03 billion, surpassing market expectations of $18.05 billion, demonstrating strong performance in the cloud infrastructure market amid soaring AI demand.
- AI-Driven Growth: For the first time, Google's enterprise AI solutions became the primary growth driver for its cloud business, with revenue from products built on Google generative AI models skyrocketing by 800%, indicating a significant enhancement in the company's competitiveness in the AI sector.
- Intensifying Market Competition: Despite Google Cloud's standout performance, Amazon AWS and Microsoft Azure also reported revenue growth of 28% and 40%, respectively, highlighting the intensifying competition in the cloud market, with all three giants expecting nearly $600 billion in capital expenditures this year.
- Emerging Competitors: Smaller neo-cloud providers like CoreWeave and Nebius have captured 5% of the market share, further intensifying competition and prompting major cloud service providers to accelerate innovation and investment to maintain their market leadership.
See More
