Americans are embracing this terrible car-buying habit. It’s costing them thousands of dollars.

U.S. car buyers are extending loan terms to keep monthly payments down as new-car prices near $50,000, but that trend is driving rising negative equity and could weigh on auto sales and consumer balance sheets. Research from Edmunds and JD Power shows nearly 31% of trade-ins are underwater, with average negative equity of $7,183 and 41% of underwater trade-ins down by $5,000 or less. Longer loans are common—72-month terms accounted for 40.5% of sales in March and 84-month+ loans 12.8%—which slows equity build and raises the risk of rollovers, repossessions and weaker trade-in demand. Automakers and dealers are increasingly using cash incentives to offset losses; consumers are advised to hold vehicles longer or favor models with stronger resale values.