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Average New Car Loan Nears $45K as Monthly Payments Hit Record High
A record 25.5% of financed new-vehicle purchases had 84-month or longer terms as average payments hit $787, Edmunds said.
- A record 25.5% of financed new-vehicle purchases in the third quarter carried 84-month or longer loan terms, up from 21.8% a year earlier, according to Edmunds, a car-shopping website.
- Rising vehicle prices and persistent inflation have squeezed consumer budgets, driving the average amount financed to a record $44,664 in the third quarter, up from $42,744 a year ago.
- Monthly payments reached a record $787, with a record 21.2% of buyers facing payments of $1,000 or more, while average interest paid over a loan's life hit $9,938.
- Longer loan terms delay equity building and increase negative-equity risk, a trend Edmunds consumer insights analyst Joseph Yoon called "a potential warning light that the vehicle is out of your budget."
- Borrowing costs are expected to increase in the fourth quarter, as auto loans remain pegged to five-year and 10-year Treasury notes, according to National Automobile Dealers Association chief economist Patrick Manzi.
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Car buyers are stretching loans to afford payments — it's a 'potential warning light,' analyst says
A record number of car buyers took out 84-month or longer loans in the third quarter, but rising amounts financed are pushing monthly payments to new highs.
·Englewood Cliffs, United States
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The latest data released by the car buying platform Edmunds shows that the average loan amount for new cars in the United States reached a new high in the third quarter of this year; car buyers borrowed more and had longer repayment periods, and the average monthly payment also rose to a record high.
·New York, United States
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Coverage Details
Total News Sources12
Leaning Left2Leaning Right0Center7Last UpdatedBias Distribution78% Center
Bias Distribution
- 78% of the sources are Center
78% Center
L 22%
C 78%
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