Record monthly payments hit American drivers

The average monthly payment on a financed new car reached $787 in the third quarter, up from $777 in the second quarter and $756 a year earlier.

Buyers financing larger amounts than ever

The average amount financed climbed to a record $44,664, while the average new vehicle sold for $50,562 in September, just $52 shy of the all-time high.

Auto loan debt reaches $1.71 trillion

Nationwide, auto loan balances reached $1.71 trillion in the second quarter, according to the New York Fed, roughly 56% more than a decade earlier.

High prices and interest rates drive the math

Vehicle prices sit near record highs and interest rates remain elevated, with the average new-car APR holding at 7%, according to Joseph Yoon, consumer insights analyst at Edmunds.

“Mix those things together and then you get record-high monthly payments. Just how the math works out.”

Pandemic shifted automakers toward profit margins

When factories shut down and parts ran short, manufacturers chose to build fewer cars with higher margins rather than maintain production volumes.

New vehicles cost 30% more than six years ago

The result of automakers prioritizing margins: new vehicles now cost about 30% more than they did six years ago.

Quarter of buyers now sign 84-month loans

In the third quarter, 25.5% of financed new-car purchases carried terms of 84 months or more, up from 23.9% the prior quarter and 21.8% a year earlier.

Longer loans mean more interest paid overall

The average amount of interest paid over the life of a new-car loan reached a record $9,938 in the third quarter, up from $9,442 a year earlier.

Long loans squeeze budgets for years ahead

Helen Colby, assistant teaching professor at Carnegie Mellon University's Tepper School of Business, warns that 84-month loans commit borrowers to five, six, or seven years of increased spending.

“For borrowers who already have tight budgets, getting such a long loan means committing themselves to five, six, or even seven years of increased spending that will reduce their budget for other things like vacations, savings, or even necessities like food and clothing.”

Wealthy buyers sustain market despite high prices

The share of new-car buyers earning less than $100,000 fell to 37% last year from 50% in 2020, according to Cox Automotive, as high-income households dominate purchases.

Used car prices remain elevated with no relief

Off-lease volume is expected to climb to 2.66 million vehicles this year and 3.29 million in 2027, up from 2.15 million in 2025, according to Experian estimates cited by JPMorgan.

“We have this huge revolving circle of negative effects on the market for the consumer. There's nowhere you can catch a break.”