- One in five buyers now pay $1,000 or more per month.
- Longer loans and bigger balances hide affordability stress.
- Wealthier buyers dominate while others leave the market.
It’s no secret that cars are getting more expensive. That’s true of both new and used cars, and the issue is big enough that automakers and lawmakers are talking about it. Now, we have new data that shows one in five car buyers in America is paying four figures a month for their ride. That’s significant because it impacts more than just the owner. It changes the market for everyone else, too.
Read: Ford’s CEO Just Blew Up Congress’s Big Auto Affordability Hearing
According to new data from Edmunds, 20.3 percent of all financed new-vehicle purchases in Q4 2025 came with monthly payments of $1,000 or more, the highest share ever recorded. That’s up from 19.1 percent in Q3 2025 and 18.9 percent a year earlier, capping off a year defined by stubbornly high prices, elevated interest rates, and consumers stretching further than ever to get into a new vehicle.
“Faced with persistently high vehicle prices and borrowing costs, many consumers were forced to adapt by financing larger amounts, stretching loan terms and, increasingly, taking on four-figure monthly payments,” said Ivan Drury, director of insights at Edmunds. “The record-setting figures we’re seeing reflect the financial strain many buyers faced throughout the year.”
Monthly Payments Break Records
It’s not just new cars feeling the squeeze, either. Used-vehicle buyers also hit a record, with 6.3 percent signing up for $1,000-plus monthly payments, driven by higher used prices and double-digit interest rates that averaged 10.6 percent in Q4. The figures behind those payments tell a deeper story.
The average monthly payment for a financed new car hit a record of $772. The average amount financed climbed to $43,759, which is also an all-time high. In other words, while interest rates are easing a little, buyers are still borrowing more money than ever before. They’re paying for that cash over a longer time period too.
Quarterly New-Car Finance Data Averages
Edmunds
Long-term loans are basically keeping deals alive. Some 20.8 percent or more than one in five buyers of financed new-cars signed up for loan terms of 84 months (7 years) or longer in Q4! Notably, that’s a dip when compared to Q3 of 2025, but it’s still well beyond what we saw before the pandemic.
In fact, it’s a sharp jump from Q4 of 2024, when 84-month loans made up just 17.9 percent of the market. Extended financing is becoming the norm, and that’s bad news for everyday consumers.
The average APR for a new-car loan landed at 6.7 percent, down slightly from earlier in the year, but still near historic highs. Zero-percent financing remains scarce, applying to just 3.1 percent of new-vehicle loans during the quarter.
That figure is up slightly from just 2.4 percent a year ago, offering a small sign that promotional offers may be starting to return. These types of deals can easily drain consumers of the ability to build long-term wealth but people are signing on the dotted line anyway.
A Class Split in Car Sales
There’s a big divide happening in the midst of all this. Data from Cox Automotive shows that new-car sales have surged 45 percent since 2019 among households earning $150,000 or more, while buyers earning under $75,000 have largely exited the new-car market altogether. That’s likely why we see a huge split in the industry when it comes to the cars we see for sale.
Countless automakers go after the affluent crowd with larger, better-equipped, higher-margin vehicles like trucks, SUVs, and premium trims that justify their price tags through size, tech, and perceived longevity.
Frankly, it’s tough to see any industry-shifting change coming down the pipeline either. As always, counting the costs before signing up for a four-figure payment (not to mention insurance) is a key part of any automotive deal.