- Average new-car payment now $773 and still climbing upward.
- Nearly one quarter of buyers choose loans lasting seven years.
- Higher vehicle prices mean buyers are juggling payment terms.
Buying a new car in America now feels less like a fun shopping expedition and more like applying for a second mortgage. And the length of the loans drivers are taking on to be able to afford a new car is increasingly mortgage-like.
According to industry data, the average monthly payment for a financed new vehicle has climbed to $773, which is only a couple of posh Starbucks coffees and fancy croissants away from $800. Or like buying a brand new iPhone 17 every single month for years on end.
Related: Used-Car Prices Are Back To 2023 Highs, And EVs Are Leading The Climb
That $773 average is up from $741 a year ago, Edmunds reports, and the crazy thing is it would be considered affordable by more than 20 percent of American car buyers. That’s the proportion of them who are paying more than $1,000 every single month to finance their new car.
New Car Finance Data
And the scary monthly costs aren’t the only eye-watering numbers. The average amount borrowed hit a record $43,899 in the first quarter of 2026 (up from $41,473), the average deposit put down at signing having shrunk since last year to $6,206 (from $65,111). That suggests many people would rather keep cash on hand for groceries, rent, insurance, and all the other hobbies adulthood forces upon us.
Another reason drivers are borrowing so much is that the average transaction price is now close to $50,0000 according to Kelley Blue Book, as buyers gravitate towards expensive trucks and SUVs.
Top 5 Vehicle Segments by Average Transaction Price
KBB
So it’s no surprise that Americans are increasingly signing up for the kind of long-term loans that were frowned upon a few years back. A record 22.9 percent of financed new-car purchases in the first three months of this year were via loans lasting 84 months or longer. A decade ago, that figure was just 10 percent, Edmunds told CNBC.
Till Death Us Do Part
Longer terms can shrink the number due each month, which helps buyers squeeze a pricey vehicle into an already stretched household budget. But the catch is familiar. Lower monthly pain often means higher total pain once interest finishes its work, and long loans can leave owners owing more than the vehicle is worth. Then the leftover balance often gets rolled into the next loan, and the problem just keeps on growing.
Used car buyers seem to be getting a better deal. Edmunds data shows they’re financing almost $1,000 less than they were last year, and with an average monthly payment of $559, they’re also paying $9 less per month.
