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When Cassie, 26, traded in her aging Jeep Wrangler for a Chevrolet Silverado 3500HD, she thought she was making a smart move.

Her Jeep was racking up miles and starting require repairs — and because she wasn't paying rent or a mortgage with her boyfriend, she felt she had room in her budget for a bigger monthly financial commitment. She financed roughly $60,000 for the truck, including negative equity rolled over from her Jeep.

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But a year later, her situation changed.

A mandated job transfer turned her commute into a 100-mile daily drive, sending her diesel costs higher. A potential move means she'll soon need to contribute toward housing expenses too.

Now she's paying about $900 a month for a truck she rarely drives, relying instead on another vehicle she owns outright because it's cheaper to operate.

The bigger problem: She still owes about $53,000 on the loan, but the truck is currently worth about $39,000.

She's now weighing whether to sell the truck privately and take out a loan to cover the difference, or trade it in for something cheaper and roll the remaining debt into another vehicle.

Cassie's situation is becoming increasingly common.

According to data from Edmunds, more than three in 10 Americans trading in a vehicle owe more than it's worth (1). Buyers carrying negative equity financed an average of nearly $56,000 in the first quarter of 2026, while their average monthly payment reached a record $932.

For Cassie, the hardest part isn't just the $900 monthly payment. It's that the reason the payment once seemed manageable has disappeared.

When she bought the truck, she wasn't facing a housing payment.

She expected to have extra room in her budget and planned to put more money toward the loan after a job change. Then her commute changed, fuel costs climbed and her living situation started to shift.

This is how many people end up feeling stuck with a vehicle loan — the math works when they sign the paperwork, but life doesn't always stick to the plan; a job change (or loss), a breakup or rising costs can all derail even carefully considered plans.

The fact that Cassie owes about $53,000 on a truck worth around $39,000 adds another challenge. She can't simply sell the Silverado and walk away with clean hands.

The roughly $14,000 gap between what she owes and what the truck is worth would still need to be covered. She could pay the difference herself, borrow money to cover it, or roll that remaining balance into another auto loan.

Before deciding what to do next, Cassie may want to get a better sense of the truck's real market value. A few trade-in offers, online estimates and private-sale comparisons could show whether the gap is as wide as she thinks — and help her weigh her options.

Rolling the debt into another vehicle might seem like the easiest escape route, but it can create a new problem. Instead of starting fresh with a cheaper vehicle, she could end up financing a car she can't comfortably afford while still carrying debt from the truck.

Edmunds found that borrowers who trade in vehicles with negative equity often end up financing more and taking on higher monthly payments than buyers who start with positive equity.

Selling the truck privately may be one option worth exploring.

A private buyer may pay more than a dealership would offer on a trade-in, which could shrink the amount Cassie needs to cover. But she would still need a plan for the remaining balance.

Here are a few options if you find yourself in a similar situation.

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If rising car payments are putting pressure on your budget like they did for Cassie, refinancing your auto loan could provide some breathing room.

Interest rates, credit scores and your financial profile can all change after you take out that initial loan. That means the financing deal that made sense a few years ago may no longer be your best option today. Refinancing gives you the chance to replace your existing loan with one that better fits your current finances.

According to LendingTree, borrowers who refinance save an average of $1,346 over the life of their loan (2). Those who opt for a shorter repayment period see even bigger savings, averaging $6,291 over the life of the loan.

The key is to avoid settling for the first offer. LendingTree lets you shop around and compare rates offered on auto loans by reputable lenders near you.

You can find rates as low as 5% APR in just three simple steps. Once you fill out their form with some basic information about yourself and the vehicle you'd like to refinance, LendingTree will match you with up to five lenders that best fit your financial profile. From there, you can choose which offer you'd like to proceed with.

The best part? This process is completely free and it only takes a few minutes.

Lowering your loan payment is a great start, but it's only one piece of the equation. Another expense that's been quietly eating into your budget is auto insurance.

Insurance premiums have climbed sharply over the past year, with drivers now paying an average of $1,084 every six months for coverage — an 18% jump from a year earlier (3).

A higher premium doesn't necessarily mean you're getting better coverage. In many cases, longtime customers end up paying more simply because they haven't shopped around in years. Insurers often adjust rates over time, even if you've never filed a claim or received a speeding ticket.

That's why it pays to shop around before simply renewing your policy. Shopping around and comparing rates through services like Insurify can help you uncover cheaper options.

Here's how it works: Just answer a few basic questions and Insurify will show you the most affordable deals in as little as three minutes.

Those who shop around and compare car insurance rates from different providers on Insurify and choose the best available deal save $1,100 on annual premiums on average.

Not only is the process 100% free, but you could also save up to 15% by bundling your car and home insurance.

Even if Cassie finds a way out, the experience offers a valuable lesson for anyone shopping for their next vehicle.

It's easy to focus on whether you can afford the monthly payment. But that's only one part of the equation.

The challenge with a car loan is that you're committing to a payment for years — even though your life and your budget can change a lot during that time.

Experts recommend looking at the total cost of ownership, including fuel, insurance, maintenance, registration and depreciation (4). A vehicle that fits comfortably into today's budget may become much harder to afford if your circumstances change.

Edmunds also suggests avoiding rolling negative equity into another loan whenever possible and shopping carefully for financing before visiting a dealership.

Vehicle payments have climbed steadily in recent years.

Experian reports the average monthly payment on a new vehicle reached $767 by the end of 2025, while the average financed amount climbed to more than $43,500 (5).

For Cassie, the truck that once felt like a reward has become a source of daily stress.

Getting out from under it may take time — and likely some difficult financial decisions — but avoiding another cycle of negative equity could ultimately put her in a much stronger position as she works toward her next goal: helping pay for a home.

- With files from Laura Grande.

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Edmunds (1); LendingTree (2); CNBC (3); AP News (4); Experian (5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.