14 Percent Of New Car Buyers In Q3 2022 Pay Over $1,000 A Month11
New car buyers are shelling out more and more cash in monthly payments, with more than 14 percent of new car payments topping $1,000 in Q3 of the 2022 calendar year.
That’s according to a recent analysis from Edmunds, which recently published an analysis of monthly new car payments. Insights from the report show that the percentage of new car buyers who committed to a monthly payment of $1,000 or more was at 14.3 percent in Q3 2022, the highest level Edmunds had ever recorded. By comparison, 12.2 percent had committed to a monthly payment of $1,000 or more in Q2 of 2022, and 8.3 percent in Q3 of 2021.
Notably, Edmunds also found that more than a quarter (26 percent) of consumers who financed an electric vehicle committed to a monthly payment over $1,000. That’s compared to 24 percent who financed a plug-in hybrid, 14 percent who financed a gasoline-powered vehicle, and 4 percent who financed a non-plug-in hybrid.
The analysis includes a list of brands with the greatest share of monthly payments over $1,000, placing GMC in seventh place with 41 percent of buyers paying more than $1,000 monthly. Overall, large trucks and SUVS were the dominant segments among the list of vehicles that commanded the highest percentage of monthly payments over $1,000. The Chevy Tahoe was particularly noteworthy in this respect, with 49 percent of Chevy Tahoe buyers committing to a monthly payment of $1,000 or more, representing a 3.5-percent market share of all vehicles financed with a monthly payment of $1,000 or more.
According to Edmunds, the rise in new car financing payment prices can be attributed to numerous factors, including low inventory, as well as a consumer shift towards larger vehicles with greater creature comforts and tech features, plus a rise in popularity for electric vehicles. These factors, combined with rising interest rates and lower incentives, have all contributed to the rise.
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Let me say this as LOUDLY as I can. This is absolute insanity! Period. Where I work, we have people driving out of here with Volvo’s and $1,300 payments! We have idiots willing to pay $700 to $900 a month for a Mazda! And that’s with an average of $4000 down. And don’t even get me going on these people who saw how much they could get for their current vehicle and sold it only to realized that they just doubled their car payment to get a new one.
I’ve been saying this for nearly a year now. We are going to see a really bad situation when this used car market drops. If we don’t get inflation under control and people start losing jobs or taking pay cuts, you are going to see a ton of car owners with huge amounts of negative equity. What’s that idiot who just paid $8,000 over MSRP on a Toyota Rav4 going to do when they are negative 10 to 15 grand? (don’t forget the extra tax on the $8000 which adds another $760 or more!!)
We never learn. That history lesson from 2008 is just waiting to bring us back down to reality.
I agree, except this time it is not bad home loans that are causing it.
Reality is waiting to smack quite a few people.
As long as people continue to pay the markups and $1000+ payments, the automakers and dealers will continue the practice of raising prices. It is a very simple concept…just because your new Tahoe has a $5000 dealer markup, doesn’t make your Tahoe instantly worth $5000 more. A car’s worth is not determined by how much YOU paid for it, so all of those markups are just instant negative equity. But, what fun is it to drive an Equinox that you can afford when all of your buddies at the golf course or girlfriends at the gym all drive shiny new Yukon Denali’s?
Actually, anything’s worth, including a car, is determined exactly by how much a person is willing to pay for it. If a person decides to pay X dollars for a car, that’s what it’s worth–at the time of the transaction. It’s entirely possible the same person will be in for a shock when it’s time to sell the car again, but such is life. As for the results of aspirational marketing, welcome to capitalism.
Well the News said our economy is booming and the Job market is healthy soooooooo with that being said . Folks feeling comfortable paying insane markups as long as they get there vehicles of choice.😎
If one truly has the income to afford $1,000 a month. It’s not a big deal. If you’re living paycheck to paycheck. It’s a time bomb. I know a couple with two car payments around $1,250 each. The household income is $350,000 a year or almost $30,000 a month. $2,500 in car payments is a drop in the bucket.
Crazy! I will wait for the recession bite next year after prices and inventory come back to earth. Plus I’ve been saving my nickels and dimes and will likely pay lots of cash up front once the rebates are back.
this goes hand in hand with everything else…our house pymt is the same as some of these people paying on a depreciating vehicle. Wait till the next downturn, they wont be able to give these over priced trucks and suvs away