NO, NO, NO. Anyone who buys a new car WITH LESS THAN 20% DOWN is upside down on their loan when they drive off the lot. Being upside down means owing more than the car is worth, not spending more than the car is worth. If your definition were the case, then every car, boat, motorcycle, and snowmobile purchase (with rare collector value execptions) are upside down, because the value decreases with time, but the amount you spent never changed.
Most people who put 10-15% down are upside down for the first year, but by the second year are above water. It's the NO MONEY DOWN buyers who stretch out payments to 6 years and have a high interest rate that remain upside down for a very long time. Sometimes they never recover, when 60 months into their 72 month loan the vehicle has 150,000 miles on it and is falling apart.
In any case, being upside down on a car loan only matters IF YOU HAVE TO SELL EARLY. Which was my point. Being "under water" on your home mortgage only matters if you have to sell immediately.
Yes. Your definition of ‘upside down’ vs ‘under water’ is more accurate. One can be under water (worth less than you paid for it) but not upside down (worth less than the mortgage owed.)
But if you’re upside down, by definition you’re under water.
Either condition is not good. Which is why I’ve never bought a new car in my entire life and I’m 58. I never intend to, either. It’s financial malpractice, in my opinion.