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New Car Loans With $1,000 Payments Set New Record In Q4 2023

As record-low inventory levels and strong demand have sent the prices of used and new vehicles to new record highs over the past few years, auto loan payments have followed suit. Rising interest rates have only made this problem worse, even as things have stabilized a bit in recent months, prompting a substantial rise in auto loan rejections, though most Ford customers are still opting to go that route. Now, new data from Edmunds suggests that even as auto loan terms improved in Q4 2023, the percentage of average new car monthly payments above the $1,000 mark hit yet another record high in the last quarter of the year.

In Q4, the percentage of customers with a monthly payment on their new car of more than $1,000 per month increased from 17.5 percent in Q3 to 17.9 percent – a big jump from Q4 2022, when that same figure was just 15.7 percent. This mark also sets yet another new all-time record, which Edmunds blames at least partially on increased luxury vehicle sales in the fourth quarter. The average loan length declined from 68.4 months in Q3 2023 and 69.7 in Q4 2022 to 67.8 months, but the average new vehicle payment rose from $736 in Q3 2023 and $717 in Q2 2022 to another new record high of $739.

This is particularly interesting as the amount buyers financed declined quarter-over-quarter – from $40,149 to $39,977 – while the average percentage rate (APR) of those loans remained the same at 7.4 percent. The average down payment did increase slightly as well, from $6,907 to $7,074. These numbers don’t tell the whole tale, however, as Edmunds notes that terms on longer loans declined in Q4 thanks to a return of incentives, as the number of vehicles financed with a zero percent APR grew from 1.1 percent to 2.3 percent quarter-over-quarter.

2024 Ford Expedition Timberline Mexico - Exterior 001 - Front Three Quarters

“On the surface, car financing appears to be following the harsh trend line of the past few years, with average monthly payments and down payments reaching all-time highs for new vehicles,” said Jessica Caldwell, Edmunds’ head of insights. “But there are some very encouraging signs as we kick off 2024 when considering the makeup of deals in the latter half of Q4 2023. Incentives are slowly coming back as inventory improves. Most consumers are looking for low APRs with longer loan terms, so the growth in those loans is helpful to lure consumers who have been sitting out due to adverse financing and pricing conditions.”

We’ll have more on the state of new vehicle payments soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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