November Sales Are Down, But Hey, At Least There's Plenty of Unsold Cars To Choose From
If you have walked past a car dealership in the last three weeks, you might have noticed something that hasn't been seen since the Before Times of 2019: lots. Full lots. Overflow lots. Rows of identical SUVs sitting in perfect, unsold formation, gathering dust and bird droppings. You aren’t imagining things. The inventory crisis of the early 2020s is officially dead, replaced by an inventory glut that is making dealers sweat through their branded polo shirts.
According to the latest joint forecast released this week by J.D. Power and GlobalData, the numbers for November 2025 are, to put it mildly, ugly. New vehicle sales are projected to drop 5.2% compared to November 2024. For an industry that relies on the holiday season to pump up its year-end figures, this is a disaster. November is supposed to be the month of big red bows and "December to Remember" sales events. Instead, it’s shaping up to be a month of awkward silence on the showroom floor.
The primary culprit, as it has been for the last 18 months, is interest rates. Despite recent adjustments by the Fed, the average interest rate for a new vehicle loan is still hovering north of 6.05%. When you combine that with an average transaction price that remains stubbornly high—around $46,029—you get a monthly payment that simply doesn't fit into the average American budget. The days of the $400/month car payment are gone, replaced by the $760/month average that is slowly strangling the middle class.
But the most terrifying statistic in the J.D. Power report isn't the sales drop or the interest rates. It is the "negative equity" apocalypse that is quietly building in the background. The report indicates that 26.9% of all trade-ins this month are "underwater." That means more than one in four people walking into a dealership owe more on their current car than it is actually worth. This is an increase of 3.3 percentage points from last year, and it is a direct result of the over-inflated prices paid during the shortage years of 2022 and 2023.
Think about the math for a second. If you bought a Kia Telluride for $10,000 over sticker price in 2023 because you "had to have it," that extra $10,000 didn't vanish. It’s sitting in your loan balance. Now that the market has corrected and used car values have stabilized (or dropped), that Telluride is worth significantly less than what you owe. To get out of it, you have to roll that negative equity—let's say $5,000 or $8,000—into your new loan. This creates a snowball effect of debt that is pushing loan terms to 84 and even 96 months just to keep the monthly payment digestible.
J.D. Power notes that loans with terms of 84 months or longer now make up 11.1% of all finance sales. We are entering an era of permanent car debt, where owners never actually reach the point of equity before the car wears out. It is a financial trap that is keeping millions of potential buyers on the sidelines, unable to trade in their current vehicles because they simply cannot afford to write a check to cover the difference.
However, there is a silver lining for the cash buyer. If you are one of the lucky few with liquidity and no trade-in baggage, you are currently the king of the dealership. Inventory levels have swelled to a 64-day supply industry-wide, and for some brands (hello, Stellantis), it’s closer to 100 days. That means the "Market Adjustment" stickers are gone, replaced by cash-on-the-hood incentives. J.D. Power reports that incentive spending is up, particularly on EVs, where the average discount is hitting a staggering $11,869.
The market has flipped. Dealers who acted like bouncers at an exclusive club two years ago are now begging you to come inside. But unless you can navigate the minefield of high interest rates and negative equity, looking at those full lots is about all you’ll be doing.
