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TikToker @Oxanaguk28 comments on various economic developments. On September 20, 2025, he warned, “Now is not the time to buy a car.” He gave three reasons why he expects the car buying market is about to collapse, and so far over 7,000 TikTokers agreed enough to like his explanation. The video discusses three major red flags.
The economics is simple: If there are more buyers than available cars, dealerships can charge more—for either used or new vehicles. This is why we saw certain models worth more than MSRP during the COVID supply chain issues. But the TikToker claims, “We’re making way too many cars and not selling enough, thanks to the current economy… they just can’t afford $700 monthly car payments anymore.”
I wasn’t able to confirm an oversupply of new cars. But it’s absolutely true that car prices have been climbing since the vehicle shortage during the COVID pandemic. The average transaction price for a new vehicle just broke $49,000, and a used vehicle just broke $25,000. The average payment for a new car loan is up to $749.
I previously wrote that 81% of Americans can’t realistically afford any new or used car available. But sadly, that doesn’t mean they aren’t buying. They are stealing funds from other parts of their budget or rolling debt. But more on that later. What’s more, NBC just reported that the dramatic rise in high-dollar luxury vehicle transactions is helping prop up automakers even when most of us can’t afford to buy.
The TikTok video continues that car loan rates are higher than is sustainable. “Normally, good rates would be around 5.18% for new cars and 6.79% for used cars. But right now, rates are way above that—especially for new cars. If cars aren’t affordable, no one’s buying.”
This is an insightful observation, and the TikToker wasn’t alone in making it. On September 17, 2025, the Federal Reserve finally cut interest rates. The goal is to increase the average U.S. citizen’s buying power and stimulate the economy, simply by making loans cheaper. This may result in more car sales.
The TikToker’s point may be the most disturbing. “The car market is dropping because defaults are hitting 29-year highs.” Again, I wasn’t able to confirm this 29-year-high number. But I did confirm delinquencies, defaults, and repossessions on used cars are sky high. Carscoops agrees with the TikTok video: “Figures show scary similarities to the period right before the 2008 financial crash.”
Because most Americans need their car to get to work, defaulting on their car loan is usually a last resort. These numbers reflect serious financial pressure.
I’ll add that used cars are worth less than new cars, so the day you drive a brand new car off the dealership lot thanks to a big loan with your bank, you’re “underwater.” That is to say, you owe more on the car than it’s worth. Let’s say you can pay off that loan in three years to minimize interest and drive that car for six years—you’ll eventually build some serious equity in the vehicle. But it takes time.
It looks like one in every four U.S. car buyers aren’t doing this. According to CNBC, 26.6% of new car buyers in 2025 are showing up with a trade-in they’re still underwater on. This means they must roll their existing debt into their new loan. The strategy is much more common than in recent years. That’s not great because it can quickly snowball into a loan these drivers will never be able to pay off.
So what happens? U.S. drivers currently owe banks and other institutions $1.6 trillion for our collective automotive fleet. Perhaps said fleet is only worth $1 trillion. So if a large portion of us default, the banks will lose out on some of the interest they are owed. But they’ll also end up with the titles to thousands of cars. Just like the 2008 financial crisis, this would essentially be a huge transfer of wealth from individual buyers to the banks.
You can see the original TikTok video embedded below, or keep scrolling for some actionable advice. MotorBiscuit’s reached out to @Oxanaguk28 for comment.
Now is not a good time to buy a car #carmarket #money #greenscreen
Are a ton of used cars about to hit the market? Is the value of the average used car about to plummet? Maybe. But maybe not. If banks end up with a glut of cars, they may decide to sit on them to avoid flooding the market. If this happens, the average used car value may remain steady.
You should definitely not pay more than MSRP for a new car, because you risk ending up even further underwater if a car value bubble bursts. If possible, you should keep driving your old car until you’ve paid it off, and then drive it as long as possible while saving money for your next vehicle purchase.
Henry Cesari is a MotorBiscuit Staff Writer who brings his deep interest in vintage cars, trucks, and motorcycles to the site. Henry covers Ford models daily, including the F-150. Having restored his first classic car at just 16 years old, Henry has wrenched on everything from overland campers to Japanese motorcycles and even pre-war Bugattis. He’s an avid attendee at local car shows and genuinely enjoys connecting with fellow auto enthusiasts. Henry earned a Bachelor’s in Anthropology and English from the University of Vermont.

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