Average Monthly Car Payments Exceeding $1,000 Hits New Record In Q2

For quite some time now, we’ve watched helplessly as the prices of new vehicles has risen to new record heights – which, when combined with stubborn interest rates – has resulted in some eye-opening car payments for folks that finance those new vehicles. With each passing quarter, we’re seeing new records set in terms of the average number of new car payments that exceed $1,000 per month, in fact, and that doesn’t seem likely to change anytime soon, given the current state of pricing, interest rates, and looming tariffs. In fact, the average number of monthly new car payments exceeding the $1,000 mark once again hit a new record in Q2 2025.

According to new data from Edmunds, the share of new car buyers committing to monthly payments of $1,000 or more hit an all-time high of 19.3 percent in Q2 2025, compared to 17.7 percent in Q1 2025 and 17.8 percent in Q2 2024. Aside from pricing that remains elevated compared to levels seen prior to the pandemic, this steady rise is also being fueled by historically high interest rates – the average new-vehicle annual percentage rate (APR) in Q2 2025 was 7.2 percent, compared to 7.1 percent in Q1 2025 and 7.3 percent in Q2 2024, in fact.

To try and offset these factors, new car buyers are seeking longer financing terms as a way to reduce monthly payments – Edmunds reports that 22.4 percent of new vehicle financing in Q2 went to loans that were 84 months or longer, which is also a new record and up from 20.4 percent in Q1 2025 and 17.6 percent in Q2 2024. The average amount buyers financed grew to $42,388 in Q2 2025 – another all-time high – which is up from $41,473 in Q1 2025 and $40,873 in Q2 2024. Shoppers are putting less money down at the time of purchase, as the average down payment was $6,433 in Q2 2025, down from $6,511 in Q1 2025 and $6,579 in Q2 2024, while just 0.9 percent of finance deals were completed with zero percent interest.

“While extended loan terms may make a monthly payment more palatable, consumers need to keep in mind the risks associated with a loan extended that far into the future, including increased costs for upkeep down the line and the risk of being underwater on the loan if the car is traded in before it’s paid off,” said Joseph Yoon, Edmunds’ consumer insights analyst. “If payments on a more standard 60- or 72-month loan don’t fit your budget, you might consider leasing. While you won’t be building equity in your vehicle the way you do with a purchase, leases afford time to get your finances in better shape with lower monthly payments in the meantime.”