How much are people paying for cars? Read and weep. Edmunds reported:
New-vehicle financing trends in Q1 2026 show car buyers continuing to take on larger loans while adjusting how they structure deals to keep monthly payments manageable, according to the latest analysis from Edmunds.
Edmunds' Q1 2026 data on financed purchases shows:
- Consumers are financing more than ever to buy new vehicles. The average amount financed for new vehicles climbed to a record high of $43,899 in Q1 2026, compared to $43,759 in Q4 2025 and $41,473 in Q1 2025.
- Monthly payments for new vehicles reached a new all-time high. The average monthly payment on financed new-vehicle purchases rose to $773 in Q1 2026, edging past $772 in Q4 2025 and up from $741 a year ago.
- $1,000+ monthly payments remain persistently high. The share of new-car buyers committing to monthly payments of $1,000 or more accounted for 20% of all financed new-vehicle purchases in Q1 2026, nearly flat from 20.3% in Q4 2025 but up from 17.7% in Q1 2025. For used vehicles, 5.3% of buyers committed to $1,000+ monthly payments, down from 6.3% in Q4 2025 but up from 4.9% a year ago.
- Buyers are putting less money down to manage upfront costs. The average down payment for new-vehicle purchases fell to $6,206 in Q1 2026 — one of the lowest first-quarter levels since 2022 — compared to $6,228 in Q4 2025 and $6,511 in Q1 2025.
- Extended loan terms reached a record high, underscoring buyers' growing reliance on longer loans to manage monthly costs. Edmunds data shows that 84-month or longer loans made up 22.9% of financed new-car purchases in Q1 2026 — an all-time high — compared to 20.8% in Q4 2025 and 21.2% in Q1 2025.
- Interest rates remained elevated for new-car shoppers. The average annual percentage rate (APR) for new-vehicle purchases was 6.9% in Q1 2026, up from 6.7% in Q4 2025 but down from 7.1% in Q1 2025. Edmunds analysts note that promotional financing remained limited: Just 2.6% of new-vehicle loans carried a 0% rate, compared to 3.1% in Q4 2025 and 1% a year ago.
"Q1 financing data shows that car buyers are getting creative just to keep their purchases within reach," said Jessica Caldwell, Edmunds' head of insights. "As loan amounts and monthly payments continue to climb to record levels, consumers are having to work harder to make the numbers fit — a clear sign of how strained affordability has become."
Ouch. Double ouch. Rest of article.
7 comments:
These figures reflect a market that is willing to pay these inflated costs. If people stopped buying new vehicles, or if they started using better financial sense when financing, the market would correct and costs would drop.
The most affordable car one can drive is the car one is currently driving.
I'm 60+ years old. I've bought I believe 8 cars and trucks, about half of them brand new, plus several tractors, ATVs, motorcycles, trailers, etc. Cumulatively I've borrowed $6,000 - for just one of those trucks - and I paid it off in 2 months.
It’s not greed but stupidity of people willing to pay this much. That’s why they chose to live paycheck to paycheck
Car you want vs. car you can afford? If paying for it over 7 yrs, buy a car w/ a cheaper total price and keep it.
I voted for lower prices.
I've never understood people who constantly get new cars. At the average car payment of $773 per month, that is $9276 per year. Folks, you can afford to repair your old car for way less than that even if it needs a major repair like a transmission replacement.
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