<p>-
- USA TODAY and Yahoo may earn commission from links in this article. Pricing and availability subject to change.Car buyers set a record with more than $1,000-a-month car payments in Q2</p>
<p>Jamie L. LaReau, Detroit Free PressJuly 7, 2025 at 2:33 PM</p>
<p>Car buyers nationally set a record in the second quarter as more opted for whoppingly long-term loans and monthly car payments that rivaled some monthly home mortgage bills.</p>
<p>According to second-quarter data crunched by Edmunds.com, the share of new-vehicle buyers to commit to monthly payments of $1,000 or more hit an all-time high of 19.3%, or nearly 1 in 5 consumers. That's up from 17.8% in the year-ago quarter. The average monthly payment was $756, up $16 from a year earlier.</p>
<p>Edmunds reported that car buyers are taking out longer-term loans to achieve palatable payments. In the quarter, 22.4% of new-vehicle financing were of loans 84 months or longer, a new record. In the second quarter last year, 84-month loans accounted for 17.6% of new-car financing.</p>
<p>Gordon Chevrolet's Finance Manager, David Finegold, assists customer Andrea Hoblack with financial paperwork in Garden City on July 1, 2025.</p>
<p>In metro Detroit, a Chevrolet and Ford dealer each reported monthly loan terms and payments are much lower here than Edmunds' national averages because of the popularity of leasing and employee discounts, both of which bring down monthly payments. But at Gordon Chevrolet, which owns a store in Garden City and Orange Park, Florida, dealer Adam Logemann said he is seeing more customers in Florida increasingly opt for longer, 72- to 84-month loans.</p>
<p>Edmunds' Ivan Drury said it would be easy to assume that the 25% tariffs President Donald Trump put on imported vehicles are to blame. But the record-breaking trends are more reflective of consumers increasingly choosing the maxed-out loan term lengths despite vehicle prices remaining steady.</p>
<p>Ivan Drury, Edmunds director of Insights.</p>
<p>"It's clear that buyers are pulling the few levers they can control to manage affordability, whether that's by taking on longer loans, financing more or putting less money down — even if some of those decisions increase their total costs," said Drury, Edmunds' director of insights.</p>
<p>Drury said the tariffs have not yet directly driven up second-quarter prices but, "they're certainly not going to make things any easier for shoppers moving forward."</p>
<p>High interest rates, long loans</p>
<p>Edmunds' data also showed that bigger loans are becoming the new normal with the average amount financed for new vehicles climbing to $42,388 in the quarter, again an all-time high, up from $40,873 in the year-ago quarter.</p>
<p>In the quarter, the average new car loan term was 69.8 months with a 7.2% annual percentage rate, up from 69 months with a 7.3% APR a year ago. The average monthly payment was $756 compared with $740 a year ago. To make matters worse, 0% finance deals accounted for 0.9% of new-vehicle loans, the lowest share Edmunds has on record since 2004 and down from 2.9% a year ago.</p>
<p>In case you missed it: Buying a new car? Why you might want to abide by the 20% rule</p>
<p>If you think used vehicles are considerably less, think again. In the second quarter, the average loan length taken on a used car was 69.7 months, that's flat compared with the year-ago quarter. The average APR was 10.9%, down from 11.5% a year earlier. Yet the average monthly payment was $7 higher at $559 compared with a year earlier. That's because the average amount financed rose to $29,080 from $28,166 and the average down payment dropped to $4,092 from $4,140.</p>
<p>Maybe consider leasing</p>
<p>Edmunds said new-vehicle buyers, like used-car shoppers, put less money down in the quarter. Edmunds' data showed the average down payment for new car purchases in the quarter was $6,433 compared with $6,579 a year earlier.</p>
<p>While extended loan terms may offer easier monthly payments, Edmunds analysts caution there could carry long-term consequences.</p>
<p>"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."</p>
<p>Yoon said even though a lease does not allow a buyer to build equity in the vehicle the way a purchase does, it gives a buyer time to get their finances in better shape with lower monthly payments.</p>
<p>Dealers say consumers are still healthy</p>
<p>At Village Ford, owner Jim Seavitt offers 84-month loan terms, but he does not encourage customers to take it if possible. He said about 10% of his 170 new car sales each month are for 84-month-long loans and he hopes to keep that rate low. About 5% of his sales result in monthly car payments of $1,000 or more a month, but those are usually for high-end Ford Expedition SUVs or F-Series pickups. In June, he said, just four sales resulted in $1,000 monthly car payments.</p>
<p>Owner Jim Seavitt at the Village Ford in Dearborn, Michigan on Feb. 2, 2022.</p>
<p>Logemann, dealer principal at Gordon Chevrolet in Garden City and Gordon Chevrolet in Florida, said because so many car buyers lease new vehicles in Detroit and there are a lot of Detroit Three automaker employees buying cars there, Detroit tends to have lower monthly payments than other parts of the country. But at the store in Florida, he said the monthly car payments are noticeably higher and more customers are extending the loan terms to get their payment down.</p>
<p>"We are seeing more 84-month loans than we have historically. Most people are looking in that 72- to 84-month loan term," Logemann told the Detroit Free Press, part of the USA TODAY Network. "Part of it is to lower the monthly payment. The other part is that the quality of the vehicles is much higher, so the ownership time horizon for the customer might be a little longer now because they have confidence in the car."</p>
<p>Customers still come to the table with adequate down payments, he said, noting: "The two big things we do in our lives is we buy a house and we buy a car. I still see people saving for those items."</p>
<p>If the customer is going to own the vehicle for an extended-term loan, Logemann said it's more important than ever that dealers provide a customer with a "top-level experience" so that they return for service during those years.</p>
<p>Logemann said despite broad uncertainty around tariffs and the economy, both of his stores had "solid" vehicle sales in the quarter and strong revenue in the service lane, prompting him to add, "The consumer, at this point, is fairly healthy."</p>
<p>Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at [email protected]. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.</p>
<p>This article originally appeared on Detroit Free Press: Car loan monthly payments hit record for buyers at $1,000 or more</p>
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