Car Payments Over $1,000 Are Now Common – Even Used
With a growing share of drivers, car payments are starting to resemble rent.
A record number of American car buyers are now committing to four-month payments, according to new data from Edmunds. By the end of 2025, 20.3% of financed new car purchases came with a monthly bill of $1,000 or more – up from 18.9% a year earlier and the largest share ever recorded.
Used car buyers are hitting records, too, with about 6% now facing monthly car loan payments of at least $1,000.
To be clear: Not every car buyer pays $1,000 a month, but almost everyone does is something paying more. The average monthly payment for a new financed car reached a record $772 by the end of 2025, up from $754 a few months ago.
In order to keep a new or used car available, buyers take out large loans and long terms – a trend Ivan Drury, Edmunds’ director of information, in the report “reflects the financial difficulties that many buyers face throughout the year.”
For most Americans, cars aren’t just a nice to own – they’re a daily necessity. In rural areas and small towns with little or no public transportation, or for families rushing to and from school, skipping the car isn’t an option. But that demand now comes with rising prices that are forcing more consumers to take out debt.
The type already appears in missed payments. Auto loan delinquencies have risen to record levels, with a growing number of borrowers at least 60 days behind on their payments – a sign that rising monthly costs are pushing some drivers past what they can realistically afford.
With new cars costing more upfront — the average price paid for a new car hit a record high of $50,326 in December, according to Kelley Blue Book — many buyers have no choice but to borrow more. And Edmunds data shows that consumers are financing more than ever. The average new car loan rose to $43,759, from $42,647 at the start of the year, with longer payment terms to help spread the cost.
Loans with terms of 84 months or longer make up about 21% of new car purchases – down slightly from the start of the year but up from the 17.9% share seen last year.
For many households, that combination can turn an unavoidable expense into a long-term financial burden.
Still, there are signs that 2026 could bring some relief. A strong note in the report is that while high prices and economic uncertainty continue to worry consumers, new car prices are starting to stabilize as improved purchasing power and softer demand reduce upward pressure on car prices.
Some analysts predict that interest rates may drop slightly in 2026, potentially giving buyers more affordable options. Still, industry experts stress that it could take months for the Federal Reserve’s policy changes to be reflected in auto loan rates. As Cox Automotive interim economist Jeremy Robb noted in the Kelley Blue Book, “because the Fed’s policy tools are slow to operate, mortgage relief will likely come in the spring or later.”
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