Nearly 20 Percent Of New Car Buyers Have $1,000+ Monthly Payment

New car buyers have been getting hammered by high interest rates and sticker prices for years now, and things haven’t improved much as average transaction prices and rates remain at high levels even as inventory has improved significantly. Rather, new car buyers continue to shell out large amounts of money each month for the privilege of financing that purchase, and things haven’t really changed much over the past quarter. Rather, a large percentage of new car buyers continue to pay more than $1,000 each month.

According to Edmunds, 18.9 percent of all new car buyers in Q4 2024 took on loans with monthly payments north of $1,000, which is actually an all-time high. On top of that, the average amount consumers financed over the final quarter of the year was $42,113 – another record – and much higher than the $40,713 they shelled out in Q3 2024, as well as $39,977 the year prior. Just 2.4 percent of all new financed vehicle purchases in Q3 were zero percent deals, and making matters worse, interest rates remain quite high – 6.8 percent in Q4, though that is a bit lower than Q3, when they came in at 7.1 percent.

“Although they tend to skew a bit higher at year end, the record highs in auto financing amounts that were set in Q4 are the culmination of major challenges to new-vehicle affordability that consumers faced in 2024,” said Jessica Caldwell, Edmunds’ head of insights. “It’s getting more and more difficult for the average shopper to walk into a new-car dealership and leave with a set of keys without feeling like they are forced to create extra room in their budget from some other aspect of life. The one bright spot is that interest rates seem to finally be on a downward trajectory, so buyers are at least getting more car for their buck rather than allocating their payments to interest.”

This particular trend is nothing new, and even as most expected prices to cool somewhat through the course of 2024 – as well as interest rates – that hasn’t really happened yet. Interest rates did finally decrease slightly in Q4 after increasing for the six previous quarters, with certain vehicles – such as the Ford F-150 – proving to be pricier to finance than others.