Aren’t most car loans “underwater?”
A car is rapidly devaluing asset. You drive it off the lot, whether new or used, and its value drops significantly.
I guess its really a function of what % of value loans are being given for, which speaks to easiness of cheap credit (thanks Federal Reserve) and aggressiveness of low-grade auto lenders.
Used to be, the down payment required would cover the instant depreciation because that was one way the loan was secured. It’s different now.