The explanation is pretty mundane.

The last 2 years have seen really, really fast depreciation, because the car shortage of 2020-2022 drove up cars way beyond their normal prices. Some cars actually appreciated in value in 2021.

So when the shortage untangled eventually, used car prices plummeted. Here's a chart of the most robust used car price index.

At the same time, several EVs saw huge price drops as Tesla tried to preserve market share against increased competition. When the new car drops in price by $20k, then the used market for that car similarly drops suddenly.

So when the value of vehicles drops unexpectedly across multiple markets, you'll have a lot more people whose car values failed to keep up with their loan balances.

Yet another reason why car-focused transportation is a hilariously dumb idea.

Build some transit already

Alternatively: "Car prices higher than ever, wages not keeping up with inflation."

I bought mine cash, used Peugeot 308, 10k€. I feel like every car in US needs a real-estate-size loan to afford it

Americans are more underwater ~~on their car loans~~ than ever before

Feels good to be completely debt free on the cars. Yes it meant when my work car started showing issues, I had to review my expectations when going electric and couldn't get the van/large car I thought I needed and we downsized to a hatch back instead, but truthfully I think that was a kick in the nuts I needed to realise I was getting pulled into a weird spiral of thinking I always need more, when really 99% of the time I'm fine in a small vehicle (and it's so much nicer to drive and get around in). For these few times stuff won't fit I'll use our older ICE which is a bit more spacious, and when that's not enough I'll rent a van and bill it to the client!

An increasingly large number of Americans owe more on their auto loan than their car is worth

So thats what it actually means.

How else can I buy the newest Ford "own the libs" truck with the lift kit and coal-rolling accessories?

I've only ever bought like 20 year old used cars. I can't even comprehend how anyone has enough money to afford a new car. It's not even the price of the car itself, which is always absurd anyways, but the cost of insurance on a car that new and registration is also just insane. A friend of mine recently bought a car that was only 5 years old and their payments including insurance and everything are still almost as much as the mortgage on my house. It's no wonder everyone is under water with their car loans.

Most people go for low money down offers on loans and stay upside down for at least half the life of the loan.