- The average financed amount in the U.S. has climbed to a record $43,899.
- More buyers are stretching loans longer and putting less money down.
- Interest rates remain high, and zero-percent financing deals are still scarce.
Buying a new car is usually the second biggest purchase anyone makes after their house, and the way car finance is going, one day you might have to take a mortgage on that new BMW. Americans are borrowing more than ever just to drive something fresh off the lot, and they’re increasingly signing up for extra-long loan terms to keep things affordable, a new report says.
The average loan for a new vehicle has climbed to a record $43,899 in the first quarter of this year, and monthly payments have edged up to $773, according to a study from Edmunds. That is not pocket change, and serves as a reminder that price of the average new car has been the wrong side of $50k for a while now.
Related: $50,000 Is The New Normal For Cars, And Inflation Gets Less Blame Than You’d Expect
Buyers are having to get creative to make the math work as a result, and one of the biggest shifts is how people structure their loans. Down payments are shrinking, falling from $6,511 in Q1 2025 to $6,206 this year, which helps buyers get into a car sooner but leaves them financing more. At the same time, longer loan terms are becoming the norm. Nearly a quarter of new car loans now stretch to seven years or more.
More Cost In The Long Term
That might keep monthly payments looking manageable, but it is not exactly a financial hack. Putting less money down and stretching a loan means paying more interest over time and staying tied to a car long after the new car smell has faded.
New Car Finance
Then there is the growing club nobody really wants to join. While the average monthly payment stands at $773, up from $741 a year ago, about 20 percent of new car buyers are now paying $1,000 or more every month. That figure has barely budged from the previous quarter but is still higher than a year ago, so we know it was no mere blip.
Interest Rates Inflating Payments
Interest rates aren’t helping either. They remain relatively high, and those tempting zero percent deals are still rare. As a result, buyers are juggling trade-offs just to keep payments within reach.
“Consumers are picking their battles when it comes to affordability,” said Ivan Drury from Edmunds. He added that while putting more money down is usually smarter, many simply cannot afford to do so right now.
There is a small silver lining. The used car market could become more appealing as more off-lease vehicles return, potentially easing prices. Until then, buying new often means balancing what you want against what you can realistically afford.
