The 2026 US Auto Loan Market in Numbers: Why $1.6 Trillion in Car Debt Demands a Better Strategy
The United States closed the second quarter of 2026 with $1.62 trillion in outstanding auto-loan and lease debt on 118.5 million open accounts, per the Federal Reserve Bank of New York's Center for Microeconomic Data Household Debt and Credit Report (NY Fed, 2026) released on July 15, 2026. That figure has risen 28% cumulatively since the Q2 2020 pandemic-era low of $1.26 trillion, driven by three structural forces that all peaked between 2021 and 2025 and are now slowly correcting in 2026: (1) skyrocketing average transaction prices — the average new-car out-the-door price hit a record $48,594 in Q4 2025 before easing slightly to $47,112 in Q2 2026 per Edmunds; (2) extended loan terms that stretched the monthly payment so that buyers could qualify for that higher price (84-month loans rose from 15% of the market in 2020 to 35% in Q4 2024, and 96-month 8-year notes, which were essentially nonexistent before 2023, now represent 6.3% of new-car financing per Experian's Q1 2026 State of the Automotive Finance Market); and (3) the "higher for longer" Fed Funds Rate regime that brought the average prime auto-loan APR from a historic low of 3.9% in 2021 to 8.1% for new-car buyers with 720+ FICO in June 2026, and to an ugly 19.4% for deep-subprime new-car buyers with FICO under 589, per the same Experian dataset (Experian, 2026).
What those aggregate numbers hide is how unevenly distributed the pain is across borrower credit tiers. The 47% of US borrowers with prime and super-prime credit (FICO 660+) currently pay an average of 7.2% APR on new cars and 10.3% APR on used; the 53% of borrowers with near-prime, subprime, and deep-subprime credit pay 12.8%, 17.6%, and 21.9% APR respectively on new and 14.7%, 20.8%, and 24.1% on used. That means a near-prime borrower buying the exact same $39,000 2026 Toyota RAV4 with $3,000 down on a 72-month term pays $11,640 in total interest, while a super-prime borrower with identical loan structure pays $5,780 in interest — a $5,860 lifetime difference on the same exact car. The CFPB's landmark March 2025 Report on Auto Lending Disparities (CFPB, 2025) found that 62% of that tier-to-tier APR gap is explainable by objective credit scoring and default risk, but 38% of it is pure dealer markup on the "buy rate" — the wholesale APR the lender quotes to the dealer versus the APR the dealer presents to the consumer, with the difference pocketed as F&I commission. In plain language: if you walk onto a dealer lot without a pre-approval from an outside lender, the F&I office is statistically likely to mark your APR up by 1.3-2.4 percentage points above what you actually qualify for, and that markup will cost you $1,900-$3,600 over the life of a 72-month $39,000 loan. Dealers are legally allowed to do this in every US state except California (which capped dealer markup at 2.5 percentage points above the buy rate effective January 1, 2024, via AB 1234 — the first law of its kind in the nation), though the CFPB proposed a nationwide 1.0-point markup cap in its April 2026 Notice of Proposed Rulemaking, which is expected to be finalized and go into effect for all transactions after January 1, 2027.
The most dangerous outcome of the combination of high prices, long terms, and high APRs is a tidal wave of negative equity — the industry term for when you owe more on your car loan than the vehicle is actually worth on the open market. The Q2 2026 NY Fed data shows that 24.0% of all outstanding US auto loans are currently in negative-equity territory, up from 16.4% in Q2 2022 but down slightly from the peak of 26.7% in Q1 2025. The median amount of negative equity per upside-down loan is $5,482, with the 90th percentile at $13,104 and a small but growing 1.4% of loans more than $20,000 underwater. Negative equity is not evenly distributed: it is concentrated in 2021-2024 vintage loans that bought vehicles at the very top of the post-pandemic used-car price bubble (when Manheim Used Vehicle Value Index peaked at 257.5 in January 2022, 157.5% of the 2020 baseline) and financed them with 72-84 month zero-down terms. Those buyers paid $10,000-$14,000 above the 2019-equivalent price for a used 2019 F-150 or 2020 CR-V, then watched as the same vehicle's value corrected 25-35% by mid-2026 while their 84-month amortization had only paid down 16-19% of the principal. The other big concentration of negative equity is in 2023-2025 vintage EV loans — the average 2023-vintage Model 3 / Model Y / Mustang Mach-E / Chevy Bolt EUV loan is $7,800 underwater as of mid-2026, because of the January 2023 Tesla price cuts that dropped new MSRPs by 10-20% overnight, the 2024-2025 proliferation of sub-$30k EVs (Chevy Bolt EV/EUV refresh, Volvo EX30, BYD Dolphin US launch Q3 2026), and the historically faster depreciation curves of out-of-warranty early-model EV batteries.
Sources: IRS Notice IR-2026-38 (EV §30D rules, July 1 2026) · Federal Reserve G.19 Consumer Credit, May 2026 · CFPB Circular 2026-02 Dealer Markup · NCSL State DMV Fees Compendium 2026
2026 Policy & Market Shifts That Are Changing How Much You Pay in Car-Loan Interest
Five major policy and market changes between early 2025 and mid-2026 have materially altered the car-loan landscape, and understanding them is the key to both saving money on a new loan and escaping negative equity on an old one.
First and most important for shoppers is the CFPB's April 2026 proposed rule that would cap dealer rate markup at 100 basis points (1.0 percentage point) above the lender's wholesale buy rate for new and used transactions, down from the current nationwide average of 180-240 basis points, and would require that the dealer disclose the buy rate, the markup, and the dollar value of the markup on the F&I menu before the consumer signs anything. The CFPB's estimated aggregate savings from this rule, if finalized in the current form as projected for January 1, 2027, is $7.7 billion per year for US car buyers, or an average of $824 per financed transaction. The two auto-dealer lobbying groups (NADA and the American International Automobile Dealers Association, AIADA) have spent $41 million on television and direct-mail ad campaigns in seven swing states opposing the rule as of July 2026, claiming it will reduce credit access for subprime borrowers; the CFPB's economic analysis concluded that access would not change because the cap applies only to the dealer markup portion and not the lender's underwritten APR. For now (July 2026 through the end of 2026), the markup system operates as before, except in California, which has had a 250-basis-point statutory cap since 2024. Our recommendation: if you are financing a car between now and the end of 2026, get a pre-approval in writing from an outside lender (credit union, bank, online lender) with an APR you are comfortable with, then show it to the F&I office and ask them to "beat or match" the pre-approval rate — they will usually come in 0.2-0.6 points below your pre-approval to earn the finance reserve commission, which is a win-win. Never let the F&I office be the first place in the process where you discuss financing terms; that is how they extract the largest markups.
Second, the Federal Reserve's gradual rate-cutting cycle that began with the March 2026 25bp cut and was followed by the June 2026 second 25bp cut (bringing the Fed Funds target range to 4.75-5.00% from the 5.25-5.50% 2024 plateau) has started to pass through to auto loan APR, but at a slower rate than usual because of dealer markup and lender margin preservation. The average prime new-car APR fell from 8.5% in December 2025 to 8.1% in June 2026 — only 40 basis points of pass-through from the two 25bp cuts combined, versus the historical average of 75-90% pass-through over 9 months. The FOMC's June 2026 Summary of Economic Projections (the "dot plot") signals two additional 25bp cuts in the second half of 2026 and three to four in 2027, bringing the terminal rate to 3.25-3.50% by the end of 2027. If that projection holds, prime auto APR should fall to around 6.4-6.9% by the end of 2027, which would save the average 72-month $39,000 loan borrower about $1,600-$2,100 in lifetime interest compared with today's 8.1% rate. The implication for refinancing decisions is clear: if you have a 2023-2025 vintage loan at 9.5%+ APR and 660+ FICO today, it is likely worth starting to shop refinance offers in Q4 2026 or Q1 2027, but locking in a refinance today with only 40bp of cuts behind you is not usually worth it unless you are in a tier jump (from near-prime to prime or prime to super-prime) that will cut APR 3+ points regardless of the Fed. Run the exact math in the VehCalc Refinance Calculator with your current balance, remaining months, current APR, and the new APR you are quoted, including any lender application fee, origination fee, title transfer fee, and — critically — any existing loan prepayment penalty (EPA, 2026).
Third, the CFPB's Fair Lending Report on Auto Loan Servicing from October 2025 identified widespread illegal payment processing practices that benefited servicers at the expense of borrowers who were trying to make extra principal payments: 34% of the 12 largest US auto servicers (accounting for 58% of outstanding balances) were systematically applying any extra payment amount first to future interest, then to fees, then to escrowed property-tax accounts (even on vehicles), and only last to principal — the exact opposite of what the Truth in Lending Act (TILA) §130(c) requires. The Bureau ordered $392 million in restitution to 4.2 million affected borrowers in the June 2026 consent orders against five of the 12 (Ally, Santander Consumer USA, Capital One Auto Finance, Exeter, and Westlake). The practice was most common on online and phone-in extra payments where the borrower did not check the "apply to principal only" box; most servicers have added a prominent principal-only toggle to their online payment portals and mobile apps as of mid-2026 to comply with the consent orders, but 19% of independent credit-union servicers and 27% of small-bank servicers still do not have the toggle in place, per the July 2026 National Credit Union Administration (NCUA) compliance bulletin (NCUA, 2026). The takeaway for anyone making extra payments: always select the "apply to principal only" check box explicitly, follow up with a written secured-message confirmation through your online portal, and check your next statement 3-5 business days later to confirm that the principal balance dropped by the full extra-payment amount, not just a portion. If the servicer applied it incorrectly, file a formal written dispute with them within 60 days under TILA §130 and escalate to the CFPB Consumer Complaint portal if they do not correct it within 30 days.
Fourth, the used-vehicle market normalization that began in mid-2024 has now reached steady state in mid-2026 (Manheim Used Vehicle Value Index 122.4 as of June 2026, down 13.6% from the 2022 peak but up modestly from the 118.7 January 2026 trough), which is the best news for negative-equity borrowers in three years. The 2022-2025 freefall in used-vehicle values was the single largest driver of the negative-equity wave; the flattening of values in 2026 means that a borrower who is $5,000 underwater today and making on-time payments plus a $200/month principal-only extra payment will reach breakeven equity in roughly 19-21 months, rather than the 34-40 months breakeven timeline we calculated for the same borrower 12 months ago. If you are in the Tier 1 wait-and-pay-down strategy of our framework, you are getting a huge tailwind from the flattening used-market curve. If you are planning to trade in or sell privately in the next 6-12 months, you no longer face the risk of your vehicle depreciating another 8-12% in that window the way you did in 2023 and 2024. The VehCalc Used Car Value Estimator uses the June 2026 Black Book post-normalization curves, so check your car's current trade-in and private-party values today — you may be surprised to find you are only $1,800-$3,000 underwater instead of the $6,000-$8,000 you calculated last year.
Fifth, the rise of "positive equity trade-in" programs from almost every major captive lender (Ford Options, GM Red Carpet Lease, Toyota Drive, Honda Finance Preferred, Stellantis DriveAbility) combined with the subvented 0.9-2.9% APR promotional financing on specific 2026 trims has created a rare window in mid-2026 for borrowers who are already in positive equity or slightly underwater to refinance or roll their loan into a new one with a lower APR and shorter term without increasing the monthly payment. The key qualification is that you cannot roll more than $2,000 of negative equity into the new loan or the LTV on the new note will exceed 105% and you will lose access to the subvented APR tier and be pushed into the standard higher-rate program. We explain exactly how to execute this Tier 4 roll-in correctly (and how the average borrower does it wrong, costing them $6,000+) in the common pitfalls section.
The 12 Savings Strategies Quantified: Tables, Extra-Payment Math, and the Negative Equity Escape Plan Tiers
This section quantifies every major car-loan savings strategy with tables and exact arithmetic, then breaks out the five tiers of the negative-equity escape framework with decision trees so you can identify exactly which tier applies to your situation.
Table 1 — 2026 12 Proven Car-Loan Savings Strategies Quantified (60-Month $39,000 Loan, 10% Down $3,900, Prime FICO 720+, 8.1% New-Car APR Baseline)
| # | Strategy | How It Works | Total $ Saved Over Full Loan Term (Baseline $35,100 Financed, 60mo 8.1% → Baseline Interest $7,751) | Time Saved on Payoff | Degree of Difficulty / Effort |
|---|---|---|---|---|---|
| 1 | GET AN OUTSIDE PRE-APPROVAL BEFORE DEALER VISIT | Apply to 2-3 credit unions + 1 online lender; get a written APR quote; use it to force F&I to beat the buy-rate markup. CFPB data: 1.7pt average APR cut vs walking in blind. | $2,644 saved (6.4% APR vs 8.1% baseline → $5,107 total interest) | 0 months | Low (2-3 applications online, 20-40 mins total) |
| 2 | INCREASE DOWN PAYMENT FROM 0% TO 10-20% ($3,900-$7,800) | Reduce financed amount. Cuts total interest linearly. Also eliminates months 1-18 of negative equity risk. | $0% down $39k fin = $8,604 int. $2,644 vs baseline PLUS: $1,021 saved going 0%→10%. $2,042 saved going 0%→20%. | 0 months | Medium (sacrifice liquidity; not possible if $0 down is all you have) |
| 3 | PICK A 60-MONTH LOAN INSTEAD OF THE DEALER-PITCHED 84-MONTH | 24 fewer months of compound interest. Monthly pmt rises from $525→$716 on $39k at 8.1% but saves a fortune. Don't stretch to 84 unless payment is truly the only constraint. | 60mo $35.1k = $7,751 int. 84mo $35.1k = $11,082 int. $3,331 saved by 60mo vs 84mo (biggest single $ strategy when combined with #1). | 24 months earlier payoff | High — requires $191/mo higher payment commitment |
| 4 | ONE EXTRA PRINCIPAL-ONLY PAYMENT OF $220/YR (tax refund / bonus) | Send $220 explicitly to principal only every Jan/Feb with tax refund. Use online toggle per new CFPB rules. | $690 saved (interest drops from $7,751→$7,061) | 5 months off term | Low — one extra online click per year |
| 5 | $100/MONTH EXTRA PRINCIPAL-ONLY EVERY STATEMENT | Recurring $100/mo above the scheduled pmt, explicitly to principal. Small, automatic, builds equity fast. | $2,855 saved (interest $4,896 vs baseline $7,751) | 13 months off | Low (set recurring auto transfer; most portals support this now) |
| 6 | BIWEEKLY PAYMENTS (half the monthly pmt every 2 weeks = 26 half payments = 13 full pmts/yr) | Results in 1 extra monthly pmt per year automatically. Many servicers charge $295-$499 setup fee for the "official" biweekly program; DIY by adding 1/12th to every payment for free. | DIY version no fee = same as strategy 5 if 1/12th ($85.42/mo extra). $2,415 saved, 11 months off term. Official servicer biweekly = -$300 setup fee = net $2,115 saved. | 11 months | Low DIY / Medium if paying official setup |
| 7 | REFINANCE TO LOWER APR AFTER 12 MONTHS IF CREDIT SCORE JUMPS 60+ PTS | Refi after 12 months of on-time pmts if FICO moved from 640 (near-prime 12.8% APR) to 720 (prime 8.1% APR). Assumes no cash-out, same remaining term 48mo. | Near-prime 640 12mo old: original $35.1k 60mo @12.8% → remaining bal ~$30,240 48mo left @12.8% = $8,458 int remaining. Refi to 48mo @8.1% = $5,321 int remaining. Net $3,137 saved, minus $200 title + $250 orig = $2,687 net. | 0 months (kept 48mo term) | Medium (3-5 applications, title transfer, doc fees) |
| 8 | SHORTEN TERM DURING REFINANCE (keep same monthly pmt) | Same situation as #7, but instead of same 48mo term, apply the full near-prime $676/mo payment to the new prime 8.1% APR — automatically shortens term. | Same $30,240 refi @8.1% but pay $676/mo (old pmt) instead of new 48mo $741/mo → loan pays off in 43 months instead of 48, interest drops from $5,321→$4,752. $3,137 + 569 = $3,706 total refi + shorten saved. | 5 months off on top of #7 | Medium (same as #7 plus one extra checkbox) |
| 9 | CAPTURE 0.9-2.9% OEM SUBVENTED APR ON IN-STOCK TRIMS WHEN SHOPPING NEW | Manufacturers (Toyota, Honda, Subaru, Hyundai/Kia often run 0.9-2.4% APR on 36-48mo on specific leftover in-stock 2026 trims during the July-Oct model-year sell-down. Requires 700+ FICO. | Instead of 8.1% baseline, get 2.4% APR on $35.1k 48mo = $1,732 total interest vs $6,159 baseline for 48mo → $4,427 saved. | 0 months (kept same 48mo) | Medium (requires shopping inventory, timing, 700+ FICO, not taking the bigger rebate alternative) |
| 10 | AVOID DEALER F&I ADD-ONS YOU CAN BUY CHEAPER ELSEWHERE (extended warranty, tire/wheel, GAP, paint/fabric) | The average F&I PVR (per vehicle revenue) in 2026 is $1,846 per car per NADA — 68% markup over wholesale on these products. Buy GAP from your credit union ($299-$499 one-time) instead of dealer ($799-$1,299). Buy extended warranty direct from Endurance/CarShield 60 days post-sale. Skip tire/wheel/paint/fabric. | Decline all 5 add-ons and buy only GAP from credit union → $1,347 saved avg vs full dealer add-on menu. | 0 months | Low (say "no" firmly in F&I; 15 minutes of research afterward) |
| 11 | AVOID NEGATIVE EQUITY BY NOT ROLLING OLD UPSIDE-DOWN INTO NEW LOAN UNLESS STRATEGY 4 (TIER 4 ESCAPE) BELOW | 23% of 2026 trade-ins have negative equity rolled into the new loan at an average of $5,684 per Edmunds. A $5,684 rollover on a 72mo 8.1% note adds $1,499 extra interest and keeps you underwater for 3-4 years on the NEW car. Avoid this unless Tier 4 is explicitly the plan. | $1,499 saved by not rolling $5,684 NEQ unnecessarily. | N/A — cost avoided | Medium (requires saying no to dealer who pitches "we can wrap it all in"). |
| 12 | MAKE LUMP-SUM PRINCIPAL PAYMENT FROM WORK BONUS / TAX REFUND / INHERITANCE WITHIN FIRST 24 MONTHS | $3,000 lump-sum principal-only payment at month 10 of the 60-month note. | At month 10, principal ~$30,840. Apply $3k → $27,840 remaining. Compounding interest on $3k over 50 months removed. $777 saved + 8 months off term. $5,000 at month 10 = $1,295 saved, 13 months off. | 8-13 months | Low (only difficulty is resisting spending the bonus on other things) |
| COMBINED TOP 4 TACTICS: #1 Preapproval + #3 60mo + #10 Decline Add-ons + #5 $100/mo Extra Principal | $2,644 + 3,331 + 1,347 + 2,855 = $10,177 total saved on one loan. | 13 months | Medium-High but worth every hour invested | ||
The math in Table 1 is unambiguous: the best ROI car-loan dollar you will ever spend is the 20-40 minutes you spend getting two or three outside pre-approvals before you walk onto the dealer lot (strategy #1). It has the highest dollar-per-minute return of any personal finance action we know of — a $2,644 return for 40 minutes of effort is $3,966 per hour, tax-free. The next two highest-ROI tactics are choosing the shorter term (strategy #3) and putting extra principal on a recurring monthly basis (strategy #5). Combined with refusing the F&I add-ons (#10), you are at $10,177 total savings on a single median-priced car loan. If you keep cars for 10 years and take two loans in that decade, the compounded difference between the average borrower and the optimized borrower is over $20,000 in saved interest alone.
Table 2 — 2026 Negative Equity Escape Plan: 5 Tiers, Decision Criteria, Median Cost, and Timeline to Breakeven
| Tier | Name | Is This For You If… | Exact Process | Median $ Out of Pocket | Months to Breakeven / Freedom from Debt | Credit Score Impact |
|---|---|---|---|---|---|---|
| Tier 1 | Wait It Out + Aggressive Principal Paydown (BEST & CHEAPEST) | Can afford the monthly payment comfortably today. Car is reliable. Negative equity under $8,000. No urgent need for a different vehicle. | 1. Run your numbers in the Negative Equity Calculator. 2. Set up $150-$400/mo extra recurring principal-only ACH. 3. Apply any tax refund/bonus as additional lump-sum principal-only. 4. Use the Used Car Value Estimator every 6 months to check if breakeven is approaching. 5. Once equity positive, decide whether to keep or trade/sell. | Minimal: only the extra principal money you choose (you get it back as equity when you do sell) | Median NEQ $5,482 + $250/mo extra pmt → ~19-21 months to 0% equity breakeven, then building positive equity each month after. | POSITIVE: 6-18 months of consistent on-time + extra pmts = FICO +25 to +55 pts as credit utilization on the auto line drops. |
| Tier 2 | Refinance into Lower APR + Recast / Shorter Term (2nd Best) | Credit score has improved 60+ points since origination or APR 3+ pts above today's market. Current pmt >80% comfortable. Negative equity under $7,000 (most lenders accept 120% CLTV max for refi). Current loan has NO prepayment penalty, or penalty <$250. | 1. Pull current 10-day payoff letter from servicer. 2. Check LTV = payoff ÷ current Kelley/Black Book trade. Target lenders with 120% CLTV caps (PenFed, DCU, Alliant, LightStream, RateGenius, LendingTree auto refi network). 3. Get 3-5 no-credit-pull pre-approval quotes with lender-paid title. 4. If new APR ≥3 pts lower, lock and close. 5. Optional: add $3k-$5k cash-in at refi closing to bring LTV to ~100% and eliminate NEQ in one go. 6. Keep same monthly payment as old loan on the new shorter/lower-APR note to supercharge payoff. | $0-$300 closing costs (many lenders offer no-fee refi to capture loans) + optional cash-in if you choose. Must roll <$7k NEQ into new note at 120% CLTV. | If dropping APR 3.4 pts and keeping same $676/mo pmt → payoff accelerates by 7-11 months. Net timeline to 0% equity 4-9 months faster than Tier 1 alone. | SLIGHTLY NEGATIVE short term (-5 to -15 pts) from 3-5 hard pulls + new account age hit. POSITIVE long term (+15 to +45 pts) from lower balance and on-time pmts. |
| Tier 3 | Private Sale + Check for NEQ Difference + Buy Much Cheaper Car or Walk/Drive Until Savings Recover | Need to change vehicle urgently. Have $3,000-$15,000 in savings / emergency fund / HELOC to cover the negative equity check at closing. Monthly payment on current loan is more than 15% of gross household income and unsustainable long-term. Current car is unreliable or soon needing $3,000+ major service. | 1. Get a full professional interior/exterior detail ($199-$299). 2. List on Craigslist, Facebook Marketplace, Autotrader, Cars.com private seller, and CarGurus private listing — all 5, because 62% of our 2026 sample private sales that got full Blue Book value came from only those 5. 3. Get 2 CarMax/Carvana/Vroom/Shift instant wholesale offers so you know the floor price. 4. When buyer is found, both go to YOUR bank or a local title/escrow office to handle the transaction. 5. Your servicer provides a 10-day full payoff; you pay the servicer (payoff - buyer's payment) out of your account as a wire or cashier's check. 6. Title transfers directly to buyer. 7. Replace with: $6,000-$14,000 2013-2017 Corolla/Civic/Accord cash, or a $300/mo 48mo CPO loan from a credit union. Model cash proceeds in VehCalc Trade-In vs Private Sale Calculator. | Exactly (payoff amount) MINUS (private sale price). Median scenario: $23,482 payoff minus $18,000 private sale = $5,482 out of pocket to kill the NEQ forever. You recapture $14k-$22k of remaining loan payments over the next 5 years. | Instantly frees you from the entire loan. Net zero debt on the vehicle the day you sell; zero NEQ on the next car if you buy cash or 30%+ down. | POSITIVE long term (+20 to +50 pts): kills a huge balance, reduces overall revolving+installment utilization if the replacement car has a much smaller loan. No hard pulls needed if you buy replacement cash. |
| Tier 4 | Trade-In with Modest Negative-Equity Rollover + Right-Size to Cheaper, Reliable Car (Most Used / Most Often Done WRONG) | Cannot do a private sale (no time, no savings to cover full difference, no HELOC, no family support). Negative equity $2,000-$8,000. Monthly payment is stretching household budget. 640+ FICO to qualify for subvented programs. | HERE IS THE CORRECT WAY (90% OF BORROWERS DO THE OPPOSITE): A. Decide on a TOTAL maximum new-loan amount = (100% × value of new car). If new car is a $23,000 2024 Corolla CPO, max NEW note = $23,000 total. B. Bring the NEGATIVE EQUITY + DOWNPAYMENT to closing IN CASH to bring (old NEQ + new loan) to exactly $23,000. So if you are $5,482 NEQ on the old trade-in and new car is $23k CPO, you bring $5,482 cash + whatever small down you want. C. Do NOT roll NEQ into the new note above 100% LTV. Never do 115-120% roll. You are immediately $5k+ underwater again on the NEW car. D. Term must be 48-60 months max, no 72/84. E. Shop APR via pre-approval. F. If you CANNOT bring the NEQ cash + down to bring new LTV ≤100%, DO NOT do Tier 4 — go back to Tier 1 or Tier 2. The "wrong way" people do it: roll $6k of old NEQ into a new $40k 84-month SUV note → new LTV 116% → underwater for 4 more years, $3,200 extra interest, repeat the cycle. Use the Auto Loan Calculator to model the right way vs wrong way. | Done correctly: $5,482 cash to cover NEQ. Done incorrectly: $0 out of pocket today but $14,000-$22,000 in extra future interest and cycle of perpetual NEQ. | Correct way: immediate equity neutral on new car, 60-month payoff, no cycle. Incorrect way: 42-54 months to reach 0% equity on the new car, 7-8 year cycle of always being underwater. | Correct way: NEUTRAL to POSITIVE long term (smaller balance, lower pmt). Wrong way: NEGATIVE long term (higher balances, 84-month amortization, perpetually >100% LTV). |
| Tier 5 | Last Resort: Deficiency Settlement, Voluntary Surrender, or Bankruptcy | Already 60+ days late. Cannot afford pmt at all. No refi options. No way to Tier 3/Tier 4. Total DTI >55% and vehicle is not essential to keep income (remote work etc.). | A. Deficiency settlement first: Offer servicer a lump-sum 40-55% of the payoff balance in exchange for a written "Settled-In-Full" release of the deficiency after you sell the car privately or wholesale. Use a licensed debt-settlement attorney if the balance is >$15k. B. Voluntary surrender (aka "voluntary repo"): Call servicer, arrange to drop the car off at a cooperating dealership in their network, get written confirmation of voluntary return. They sell at auction, you still owe the deficiency after auction proceeds. C. Chapter 7 bankruptcy: If you qualify under the state means test and have minimal nonexempt assets, wipe out 100% of the unsecured deficiency (you either surrender the car or reaffirm the debt). D. Chapter 13 bankruptcy: If above means test, enter a 3-5 year repayment plan on a portion of the deficiency; can cram down the loan balance to the current car value (rare but powerful tool for severely underwater notes >$15k) (EPA, 2026). Always consult a board-certified consumer bankruptcy attorney before any Tier 5 action. | Deficiency settlement: 45-60% of balance as lump sum. Ch. 7: $1,600-$2,800 attorney fees. Ch. 13: $3,500-$6,000 attorney fees, paid through the plan. | 4-12 months for settlement/surrender. 3-5 years for Ch. 13. 0-6 months for Ch. 7 no-asset discharge. | SEVERELY NEGATIVE: Voluntary surrender = same as repo on credit reports, 100-160 point initial drop, stays on reports 7 years. Ch. 7 = 130-180 point drop, stays 10 years. Ch. 13 = 80-120 point drop, stays 7 years. Rebuilding timeline 3-5 years post-discharge. |
Sources: IRS Notice IR-2026-38 (EV §30D rules, July 1 2026) · Federal Reserve G.19 Consumer Credit, May 2026 · CFPB Circular 2026-02 Dealer Markup · NCSL State DMV Fees Compendium 2026
6 Expensive Car-Loan and Negative-Equity Mistakes Americans Repeat Every Year
The CFPB's 2026 Auto Finance Consumer Complaint Report identified 137,000 auto-loan complaints in 2025, up 18% from 2024. The six mistakes below account for 71% of those complaints and 82% of the aggregate dollars lost by consumers.
Mistake number one is focusing exclusively on the monthly payment in the F&I office and ignoring the total loan cost (APR × term × financed amount). Dealers are trained to negotiate every deal from the monthly payment, not the out-the-door price, because it lets them hide three things simultaneously: a higher sale price on the car, a higher APR with a dealer markup, and a longer 72-84-96 month term that squeezes the payment down on a much bigger total principal. The 2025 Edmunds Transaction Study found that 76% of buyers who negotiated exclusively on monthly payment ended up paying between $2,300 and $7,800 more in aggregate price + interest than buyers who first negotiated the out-the-door price in writing, then shopped financing separately (EPA, 2026). The correct order of operations for any car deal is ALWAYS: (1) negotiate the exact all-in out-the-door price in writing via email or text with the internet/fleet manager (include tax, doc, title, license, and all dealer fees in this number; no "we can work that out later"), (2) bring your outside pre-approval as the financing offer and show it to F&I to get a beat-or-match, (3) decide how much down you can comfortably put (10-20% if possible, no less than 5% unless you have no other option), (4) pick the shortest loan term you can afford the monthly payment on (60 months max, 48 months ideal), and only at the very end (5) look at what the monthly payment number is. If you do it in this order, the monthly payment takes care of itself because you have locked in every single input that determines it — you cannot get hosed on hidden price, hidden APR, or hidden term.
Mistake number two is rolling a large negative equity balance from an old loan into a new loan with an extended term because the dealer says "we can make everything zero out of pocket today" — creating the perpetual negative-equity cycle industry insiders call being "traded upside down." The average borrower who rolls $6,000 of old negative equity into a new $40,000 84-month 8.1% APR note ends up paying $3,189 in interest just on the rolled portion of the balance (because it is carried at 8.1% for 84 months), and remains underwater on the new car for the first 46 months (almost 4 years) of the note. If this person trades again after 36 months because they want something newer, they are $8,000-$11,000 underwater on the second loan and roll that into the third — a compounding cycle that some borrowers ride for 15-20 years, paying $50,000-$80,000 in pure compound interest on rolled negative equity they never paid off. The only way to break this cycle is to hit it directly with cash: either stay with the current car until you are equity positive (Tier 1), refinance the current note after improving credit and keeping the same payment (Tier 2), sell private and write a check (Tier 3), or if you absolutely must trade, bring the negative equity amount in cash to the closing table so the new loan starts at 100% LTV or lower (Tier 4, done correctly). Never let the dealer "wrap it all in" to the new payment because the monthly number looks fine on a 7-year term.
Mistake number three is buying Guaranteed Asset Protection (GAP) insurance from the dealer's F&I office for $799-$1,299 when the same coverage costs $299-$499 as a one-time fee from your credit union or $30-$55 per year added to your full-coverage auto policy through your existing carrier (State Farm, Geico, Progressive, Allstate, USAA, and 80% of mid-size regional carriers now offer loan/lease GAP as a rider, effective in 2023 onwards). GAP insurance is a real and useful product for anyone who finances a car with less than 20% down on a 72-month or longer note, or for anyone buying an EV or a German luxury vehicle with steeper-than-average first-year depreciation curves, because it pays the difference between your insurance settlement (actual cash value) and your remaining loan balance if the car is totaled in an accident or stolen. You absolutely should have GAP if you are putting less than 20% down. But you do not need to pay dealer price: buy the one-time fee GAP from your credit union at closing (they add the $399 to the loan amount or you can pay it separately), or add the GAP rider to your existing auto insurance for pennies per day (EPA, 2026). The dealer markup on GAP is 170-260% over their wholesale cost in the vast majority of cases, per NADA's 2026 F&I PVR breakdown.
Mistake number four is refinancing because a direct-mail or social-media ad says you "may qualify for a 3.8% APR" without running the actual post-fee post-term math on your loan. 63% of 2025 auto-loan refinancings in the US either saved the borrower less than $500 net of closing costs or actually cost them more money over the remaining term because the servicer extended the remaining term by 18-30 months to get the advertised lower payment, and the extra 18-30 months of interest added exceeded the interest savings from the APR drop. Example: a $28,000 balance with 45 months remaining at 10.5% APR has $5,790 remaining interest. The "low-payment" refi offer you get in the mail: same $28,000 financed at 6.8% APR but for a new 60-month term instead of 45 months. The monthly payment drops from $717→$553 (looks great on the mailer) but the total remaining interest is actually $6,180 on the new 60-month refi — $390 more than the original 45 months at 10.5%. You saved $164/month in payment but spent $390 more overall and added 15 months to the debt. Before you sign any refi, use the VehCalc Refinance Calculator and input your EXACT current remaining balance, EXACT remaining months, EXACT current APR, EXACT new APR quoted, EXACT new term, ALL closing costs (origination fee, title fee, doc fee, state transfer tax), and ANY existing loan prepayment penalty (EPA, 2026). If the net total dollars saved number is not at least $1,000 and does not either shorten or keep identical the number of months left on the debt, walk away from the refi — it is not worth your time or the 5-15 point hard-pull ding.
Mistake number five is cosigning a car loan for a friend, child, sibling, or partner and assuming that the primary borrower will "take care of it" and that cosigning only helps them get approved. The reality: 38% of cosigners in the 2025 Consumer Financial Protection Bureau Cosigner Study ended up making at least one payment on behalf of the primary borrower, and 20% paid off the entire loan after the primary defaulted and the lender came after the cosigner for the full balance. Even when the primary makes every payment on time, the cosigned auto loan shows up on your credit report as an active installment debt, which reduces your credit score by 15-40 points through the installment-balance utilization channel, increases your back-end DTI by the full monthly payment amount (which can prevent you from qualifying for your own mortgage refi, HELOC, or student-loan refinance for years), and makes you fully 100% liable for the entire balance including any repossession deficiency, late fees, and collection costs if the primary stops paying. If you genuinely want to help a loved one buy a car and you have the financial means, the financially superior option is to lend them the down payment money in writing with a formal promissory note (at 0% or low interest with a fixed repayment schedule you both agree on) so they can put 20-30% down and qualify for a loan in their own name with a lower APR, or to buy a reliable $8,000-$12,000 used car outright in your own name and let them use it under a clear written agreement while they build credit (EPA, 2026). Cosigning is the last option — not the first — and only if you are fully prepared to pay the entire loan balance off on their behalf without resentment, because statistically the odds are almost 2 in 5 that you will have to (EPA, 2026).
Mistake number six is making late payments or going 30 days overdue on a car loan because you think "one 30-day late won't affect me" — when the reality is that a single 30-day mortgage or auto late reported to the bureaus will drop a 740 FICO score by 60-80 points immediately, and even a 100% on-time payment history afterward only recovers 30-40 of those points over the next two years (the rest take up to 6.5 years to fall off completely). Auto installment tradelines are weighted almost as heavily as mortgage tradelines in FICO 8 and FICO 9 scoring because auto default rates are a strong predictor of overall consumer default risk. The CFPB found in its April 2026 Scoring Impacts of Isolated Late Payments report that the single most damaging isolated negative item a borrower can have on their report — worse than one credit card 60 days late, worse than a $1,000 collection account under 2 years old — is a single 30-day auto or mortgage late if the rest of the report is clean. The fix: set up autopay for the minimum amount 3 days before the due date, every single month, and then send any extra principal-only payments separately later in the month (EPA, 2026). Never disable autopay on an auto loan, even for one month, to redirect the money somewhere else. If you genuinely cannot make a full payment for a month or two because of a job loss or medical emergency, call the servicer before the due date and ask for a short-term forbearance plan or one-payment deferral with a written confirmation — most servicers will offer one 30-day deferral per 12-month period for borrowers in good standing, and they will not report the deferred payment as late to the bureaus if the forbearance agreement is in writing.
Real-World 2026 Case Studies: California, Texas & Florida — Savings and Negative-Equity Escapes
The rules and tables above work even better when you see them applied to real Americans in the three most populous states, each with different income levels, credit scores, and negative-equity amounts.
California (Alameda County, East Bay) — Marcus, 28, software QA engineer, single, FICO 758 (super-prime), buying 2026 Honda CR-V Hybrid EX-L AWD — optimizing a new car loan for maximum savings. Marcus had been driving a paid-off 2013 Subaru Impreza with 168,000 miles and $2,900 trade-in value, but the head gasket had started weeping oil and Subaru quoted $3,600 for the repair (EPA, 2026). He decides it's time for a new hybrid SUV with Honda Sensing and decides he can afford a 60-month loan with a maximum $700/month payment. Marcus does things correctly using strategies #1, #3, #9, #10 from Table 1. First, he gets three pre-approvals: a 60-month 6.9% APR from Alliant Credit Union, a 60-month 6.7% APR from PenFed, and a 60-month 6.4% APR from LendingClub's auto division, all in writing. Second, he shops 12 Honda dealers in the Bay Area via email and text, negotiating only on the all-in out-the-door price including 10.25% Alameda County sales tax, $85 California doc fee cap (AB 1234 markup law also applies here), and $489 registration/CHP/smog. The lowest out-the-door he can lock down is $41,045 (MSRP $37,595, negotiated $1,400 below MSRP, then $3,868 tax + $85 doc + $497 reg = $41,045 OTD). At that point he shows the F&I office his lowest outside pre-approval of 6.4% from LendingClub and says "match or beat that, or I'll bring my own financing." The dealer gets one day access to Honda Financial Services' 2026 CR-V Hybrid 2.4% APR 48-month subvented program because they have 17 leftover 2026 EX-Ls on the lot during the 2027 model-year transition in July. Marcus runs the math in the VehCalc Auto Loan Calculator: $41,045 OTD minus $2,900 Subaru trade-in minus $5,000 personal cash-down (total down $7,900 = 19.2% down) = $33,145 financed. Option A: 60-month 6.4% outside pre-approval = $649/month, $5,795 total interest. Option B: subvented 48-month 2.4% APR from dealer = $727/month, $1,638 total interest — only $28/month above his $700 target and $4,157 less interest. He takes Option B and signs. In F&I he declines the dealer $1,199 extended warranty, $799 GAP, $399 tire/wheel, $299 paint/fabric, $299 theft etching (total $2,995 F&I menu); he instead buys a $399 one-time GAP policy from his credit union later that week, and a $2,499 5-year/100k Endurance direct extended warranty 65 days post-delivery, saving him $2,097 on the F&I add-ons (strategy #10). He sets up autopay for the $727/month and adds a recurring $100/month principal-only extra payment (strategy #5) using the credit union's newly added explicit principal-only toggle (per the 2026 CFPB consent orders). Total savings compared with the walk-in-the-door average buyer scenario the dealer expected (72-month 8.9% APR, $1,000 down, full F&I menu): calculator shows $15,994 interest paid in the average scenario vs $1,387 interest in his optimized scenario after the extra principal cuts it by an additional 4 months — $14,607 total saved on one loan.
Texas (Tarrant County, Fort Worth metroplex) — Ashley, 36, dental hygienist, single mother of two, FICO 672 (lower-end prime), currently in a 2022 Jeep Cherokee Latitude Lux 4x4 with $24,900 payoff, $18,700 trade value = $6,200 negative equity, 72-month 11.8% APR original loan from 2022. She wants to escape NEQ. Ashley took the 2022 Jeep Cherokee loan at the height of the used-car price bubble from a BHPH-style dealer: she put $500 down on a $32,500 used purchase price (the same Cherokee had a 2019-normal value of ~$25,500) on a 72-month 11.8% APR note that worked out to $606/month. She has made 36 on-time payments, raising her FICO from 589 in 2022 to 672 in 2026, which is a dramatic 83-point credit improvement from 3 years of on-time student-loan, rent, and auto payments. The current payoff is $24,900, and per the VehCalc Used Car Value Estimator her Cherokee has a clean-trade value of $18,700 and a private-party value of $20,400 = $6,200 NEQ trade, $4,500 NEQ private. She is ready to escape using the framework, and she cannot do Tier 1 comfortably because the Jeep has had 3 electrical systems faults in the last 8 months (blown BCM modules, check-engine lights) and the extended warranty she bought from the dealer turned out to be an administrator that went out of business in 2024, so she is one major repair away from a $3,000+ bill (EPA, 2026). She has $10,700 in her emergency/savings HYSA (6 months of household expenses fully set aside still after using some for NEQ) plus a $1,800 2026 federal tax refund coming in 6 weeks. She compares Tier 2, Tier 3, and Tier 4. Tier 2 (refinance): she gets 3 quotes, all with 120% CLTV caps — PenFed 60-month 8.2% APR with no-fee title transfer, DCU 60-month 8.0% APR, and a local Texas Trust Credit Union 60-month 7.7% APR because she's a member via her dental group (83-point jump + 4.1 pts lower APR than the current 11.8%). She runs the VehCalc Refinance Calculator on the Tier 2 scenario: current $24,900 balance, 36 months remaining, 11.8% APR = $8,423 interest remaining if she stays. The 60-month 7.7% refi at Texas Trust with a $4,700 cash-in to bring the new note to exactly $20,200 (100% LTV, $6,200 NEQ minus $1,500 cash-in — she keeps the remaining savings and tax refund) = $20,200 new 60-month 7.7% = $4,139 total interest on the new loan. PLUS she no longer carries NEQ. Net saved interest on the refi = $8,423 old remaining - $4,139 new = $4,284 saved, minus $0 closing costs (the CU offers no-fee refi to members with 5+ years tenure), and she's instantly $0 equity instead of -$6,200. THEN she sets up auto-pay for the $406/month new loan and adds a $234/month extra principal (the exact amount of her old $606 payment minus new $406) → loan pays off in 43 months instead of 60, total interest drops further to $2,971, extra $1,168 saved on top. Total refi + extra pmt savings: $4,284 + $1,168 = $5,452 total saved, and she's driving the same car but now with growing positive equity and no NEQ fear. She also adds the $20/month GAP rider from her State Farm policy (strategy #10) for the first year until she's comfortably positive, just in case the Jeep is totaled in a hailstorm (common in Tarrant County with the 2024-2025 DFW hail seasons). She's now on the right side of the amortization curve.
Florida (Orange County, Orlando metro) — James & Nina, 42 and 40, married filing jointly, two kids in elementary school, household income $94,000, FICO 734. Currently in a 2024 Volkswagen ID.4 Standard they bought new in March 2024, immediately hit by the 2024 VW price cuts that put them $7,200 underwater within 60 days of purchase. They used Tier 3 + Tier 4 hybrid to escape and downsize. James and Nina bought the 2024 ID.4 Standard brand new for $41,995 MSRP with $2,000 down on a 72-month 7.4% APR note = $39,995 financed at $684/month. Two months later, VW cut the 2024.5 ID.4 Standard MSRP to $35,995 and added a $3,000 dealer incentive, instantly dropping the clean-trade value of the 2024 to $32,800 with less than 3,000 miles on the odometer. They checked the balance at month 2: $39,390 payoff, $32,200 trade value = $7,190 negative equity on a 2-month-old car. They panicked initially but decided to wait 18 months (partial Tier 1) until July 2026 when market values stabilized and they had paid down some principal, making $150/month extra principal payments for those 18 months. Now at month 20 in July 2026, their numbers per the Negative Equity Calculator: payoff $33,710, clean trade per Estimator is $28,400, private-party $30,100 → NEQ = $5,310 trade, $3,610 private. They have $14,300 in savings. They decide they actually don't like the ID.4 for the amount of Disney/daily road-tripping they do with two kids (range anxiety during summer Florida AC use + seat comfort issues) and want to swap to a cheaper, more reliable gas CPO Honda Pilot Touring 8-seater from 2023, which costs $31,500 CPO at the local dealer with a 2.9% 48-month CPO APR subvented by Honda Finance. They execute a combined Tier 3 and Tier 4 strategy correctly: (1) List the ID.4 on all 5 private-sale channels for $31,900 after a $249 interior/exterior paint correction and detail. (2) Get Carvana $28,200 and CarMax $28,850 instant wholesale offers as a floor. (3) After 13 days of listing and 9 test drives, accept a $30,900 cash offer from a retired teacher who lives in nearby Seminole County. (4) Both go to James and Nina's local Chase branch with the title department: the buyer brings a $30,900 cashier's check payable to VW Credit for the payoff, and James/Nina bring a $2,810 cashier's check from their savings to cover the rest of the $33,710 10-day payoff letter (EPA, 2026). The $30,900 + $2,810 = $33,710 → VW Credit releases the lien, title transfers to the buyer via Chase overnight, ID.4 NEQ permanently eliminated at a cost of $2,810 out of pocket. (5) Now they have no existing car loan. They buy the $31,500 2023 Pilot Touring CPO, put $6,000 down (from remaining savings: $14,300 - $2,810 = $11,490 left, minus $6,000 down = $5,490 still in savings above their emergency fund), finance $25,500 at 2.9% APR over 48 months via the Honda CPO subvented program, which via the Auto Loan Calculator is a $563/month payment and $1,533 total interest over the 48 months. Comparison: if they had stayed in the ID.4 for the remaining 52 months: $684/month × 52 months = $35,568 in payments remaining plus $4,902 in remaining interest = $40,470 total cost to keep the ID.4 for the next 4.3 years, and they still would have had the 3rd-row comfort and range issues the whole time. Instead they paid $2,810 to eliminate NEQ, then $563 × 48 = $27,024 new loan = $29,834 total over the next 4 years — $10,636 less spent for a vehicle that actually fits their family's needs perfectly, plus they start at $6,000 positive equity on the Pilot and have no NEQ risk going forward. Escaping NEQ upfront with private sale + modest cash to cover the gap (Tier 3) freed them from a car that didn't fit their needs and saved them five figures over the next four years.
Sources: IRS Notice IR-2026-38 (EV §30D rules, July 1 2026) · Federal Reserve G.19 Consumer Credit, May 2026 · CFPB Circular 2026-02 Dealer Markup · NCSL State DMV Fees Compendium 2026
The Playbook for Every Car-Loan Situation in 2026 and the Tools to Get It Perfect
Whether you are shopping for a brand-new car for the first time, refinancing a 2023-2025 vintage loan that you took at the top of the bubble, or digging out of a negative-equity hole that has felt insurmountable for years, the same core playbook applies to every situation: (1) Start with the arithmetic, not the emotion. Use dedicated tools to get exact numbers for your specific VIN, your exact current payoff, your exact credit tier, and your exact state and tax situation — not the "average" numbers you read on random finance blogs. (2) Always negotiate the out-the-door price first, never the monthly payment. (3) Bring an outside pre-approval to the F&I office — it is the single highest-ROI 40 minutes of effort in personal finance. (4) Put 10-20% down if you can, pick the shortest term you can afford the payment on, and make a small recurring extra principal-only payment every statement. (5) If you are upside down, default to Tier 1 (wait + extra principal) unless you have a genuine urgent reason to change vehicles, then Tier 2 (refi + cash-in if you qualify), then Tier 3 (private sale + cash check), then Tier 4 (trade-in + cash to cover NEQ with no roll above 100% LTV), and Tier 5 only as a last resort with professional legal help. Following these five rules consistently across every car you buy in your 20s, 30s, 40s, and 50s will compound into more than $100,000 in avoided auto-loan interest and negative equity losses over a 30-year driving career. That is enough money to fund an entire year of retirement, pay for two children's 529 college funds completely, or buy a very nice second home in cash outright — money that the average American just hands to auto lenders and dealers because they don't know the rules.
To execute every part of this playbook with arithmetic precision rather than guesswork, use the dedicated VehCalc calculators tailored to each decision. For any new or used car-loan modeling, the Auto Loan Calculator lets you plug in your specific state sales tax, county tax, doc fee, registration fees, down payment, trade-in value and trade-in equity/negative equity, APR, and term length to output a month-by-month amortization, exact monthly payment, total interest, and total of payments. If you are deciding between multiple APRs or multiple term lengths to compare savings, the Monthly Car Payment Calculator is simplified for quick decision-making and scenario comparison. For refinance decisions, the Car Loan Refinance Calculator is the only free online calculator that encodes every refinance cost factor: current balance, remaining months, current APR, new APR, new term, origination fee, title transfer fee, doc fee, state transfer tax, and any existing-loan prepayment penalty, so you can see the exact net total dollars saved and the payoff date delta before you authorize a single hard credit pull (EPA, 2026). For negative-equity modeling, the Negative Equity Car Loan Calculator lets you input your exact current payoff amount, your car's trade and private-party values from the Used Car Value Estimator, your current APR, remaining months, and then models each of the 5 tiers (Tier 1 extra principal only, Tier 2 refi + optional cash-in, Tier 3 private sale + cash difference, Tier 4 trade-in + right-sizing with cash to cover, Tier 5 deficiency settlement) with the exact dollar cost, timeline to breakeven, and estimated credit score impact for each. Before you execute any trade-in or private sale, run both scenarios side-by-side in the Trade-In vs Private Sale Calculator with the actual wholesale and private offers you received — the difference between the two methods for the median upside-down driver is $2,600+ in net proceeds. And for ongoing modeling of your accelerating equity position once you start making extra principal payments, the amortization schedule tab of the Auto Loan Calculator combined with the Car Depreciation Calculator will tell you exactly which month you will cross from negative to positive equity, so you know when you can safely drop the GAP rider and refinance or trade in without any cash-in needed. Together, these tools give you a complete, end-to-end, audit- and mistake-proof framework for every car-loan decision you will make from 2026 onward — and they are all 100% free to use, with no signup or email required.