Average Monthly Car Payments Hit All-Time High Of $736, As APRs Soar Over 7%
Both the new and used vehicle markets are shattering records, but unfortunately, it’s the kind of record-breaking that’s causing headaches for buyers. While there have been some small improvements recently, overall, prices have soared to historic highs, leaving buyers with significantly lighter wallets than they anticipated. To add to the financial burden, high loan rates are a prevalent concern, making car financing a daunting task for many potential buyers.
Data gathered by Edmunds relating to third-quarter transactions shows that average monthly payments for new vehicles reached an all-time peak of $736, up from $733 in the second quarter of 2023. Meanwhile, the proportion of the market with a monthly car payment of more than $1,000 reached an all-time high of 17.5 percent. That’s an increase of 0.4 percentage points over Q2 2023.
Even in the used market, consumers are facing pressure. Whereas the average down payment in Q2 was $4,107, it reached a new record of $4,111 in the third quarter of this year. The only shred of good news was that the average amount financed across new and used vehicles fell slightly, by $207 and $337, respectively.
Despite that, the average annual percentage rate (APR) for both new and used vehicles continued to rise. For new vehicles, the figure rose to 7.4 percent, and for used vehicles it jumped two percentage points, to 11.2 percent. The last time we saw APRs that high was in the second quarter of 2007, on the eve of the Great Recession.