Since the onset of COVID-19 pandemic and the associated production cuts and supply shortages, new car payments have been on the rise as vehicle inventory at dealerships struggled to remain consistent. Now, despite inventory levels recovering to nearly pre-pandemic heights, new car payments reached record highs as of Q4 2023.
According to a report from Edmunds, average payments rose to $739 per month, which is up slightly from $736 in Q3 2023 and $717 in Q4 2022. In addition, down payment averages crossed the $7,000 mark for the first time to $7,074 in Q4 2023, as compared to $6,907 in Q3 2023 and $6,780 in Q4 2022.
While the average monthly payment is certainly sky-high, digging deeper reveals that 17.9 percent of new car payments come in at $1,000 or more a month, also a new record. For reference, 17.5 percent and 15.7 percent of consumers paid this amount in Q3 2023 and Q4 2022, respectively.
“On the surface, car financing appears to be following the harsh trend line of the past few years, with average monthly payments and down payments reaching all-time highs for new vehicles,” Edmunds’ Head of Insights Jessica Caldwell claimed in a prepared statement. “But there are some very encouraging signs as we kick off 2024 when considering the makeup of deals in the latter half of Q4 2023. Incentives are slowly coming back as inventory improves. Most consumers are looking for low APRs with longer loan terms, so the growth in those loans is helpful to lure consumers who have been sitting out due to adverse financing and pricing conditions.”
While these current new car payments are not ideal, Edmunds believes there may be some positive indicators for the future. These include items like lower APRs becoming more available, and a notable jump in the share of new vehicle sales with zero percent APR financing.
“While shorter term loan deals are still most common with low APR financing, it is encouraging to see more reasonable term lengths becoming more prevalent with APRs below 4 percent,” Edmunds’ Director of Insights Ivan Drury stated.
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Comments
I’m seeing some people setting records with negative equity. I had one today, he was $31,000 upside down in a 2014 vehicle with 177,000 miles.
Impressive.
i work in finance. this is impressive.
Unbelievable! What an idiot!
How does that happen?
G.M. Detroit send my Father a Ignition Switch Recall Paper that’s said on it April 7/2010 but my Dad got it on September 21/2010 but his horrible accident was September 17/2010 he was kill I called G.M. Detroit and talked to some lady I said it a bet to late my Dads Die I send the Ignition Switch Recall letter to Lawyers in Canada trusting them but that a Big Mistake on my Part they throw me and my Dad that was kill in a 2008 Cobalt the Lawyers Kept the letter And Said I never gave to more or less they made me feel Stupid and Bully me I know what happened I’ve just be Fighting for my Father that’s all he fight for self My Fathers Life Matters And Shame on you G.M. And the Lawyers I’m Sorry but I think how my Father was Kill in that Horrible Accident in a 2008 Cobalt and the Ignition Switch Recall Paper that send to my Dad on September 21/2010 If anyone Cares
and he wanted to trade that in? what a moron, hope he has more cash than brains….
I’m not one of those persons who is going to talk about how I bought a car in the past for 15k that ran for so long etc. We all know those days are long gone. But $739 a month with a $7000 down payment, almost 20 percent of people having $1000 plus car payments, plus insurance cost is just insanity and unsustainable.
Sadly, mom has the latest SUV and dad drives an HD diesel to work, but the kids have no college fund, but their driveway is very impressive!
Pure insanity. And for what? Society has become so obsessed with having the latest and greatest of everything that they don’t realize just how far they are setting themselves back. Also, way WAY too many people are buying these vehicles without any thought about the insurance, upkeep and registration fees. Where I live, my $28,315.00 Chevy Bolt has a $530.00 annual registration fee. I about burst when I saw that and won’t make that mistake ever again. But I also have a 60 month loan with $2,500 down and under $500 payment. To top it off, I’m not spending $400 + a month on gas and my insurance is quite cheap. But I know people who have purchased/leased fancy vehicles and had to have the huge rims/tires. Yet when the time came to replace tires, they threw a fit when they were quoted $1,200 to replace them. You want to play, you gotta pay.
its 20$ here a year. registration is a non factor for half the country, if not more. just sayin
insurance will get you tho
tires.. a good tire regardless of size is 250 . it dont matter anymore. 20″ or 18 or 22″ pretty much same cost. just sayin.
Yep, my guess he lives in CA. Very expensive to register. I think when I left I was paying 600/yr on a car I’d just bought in the mid-90’s. TX runs I think 50/yr and is indeed a registration fee, with no valuation tax like CA has.
lol and mkAtx: You are correct. I do live in CA. I’m originally from IL and the reg fee there is still reasonable. However, it’s the states tacking on $200 +/- because it’s an EV and many states are doing that as well. Here’s the funny thing to me. For 12+ years I sold cars in Iowa near where I lived in Illinois. This goes back to 1988 to 1995 and again from 2007 to 2011. Even back in those days, the reg in Iowa was stupid high. It was based on the MSRP of the car (which I can understand) and I was seeing $400 and $500 reg fees back in 2010. I will say that the fees went down after 5 years and continued to go down each year after. But compared to IL and WI fees, the Iowa fees were really high.
Tires: Uhg. That has become part of why I try to get a new car every two years. I can’t tell you the last time I purchased tires for my daily driver or spent money out of pocket for anything other than an oil change when still driving ICE. But the thought of spending $1,000 to $1,500 for tires just kills me.
we used to be taxed here at your registration’s mil rate at 40% of the vehicle value as determined by the state. in 2012 they changed it so you pay an amount up front at initial titling and then just 20$ for ever.
they did this to milk money out of the leasers and car swappers. who would only pay 200-300 if that over 2-3 years. now they pay 4k or whatever for the same period….
i know that in california many people opt to sell the car out of state rather than pay the fees to make it road legal. i’ve bought a car like that and had it shipped across the country from orange county. great car, just had like 6k in back dues i was told. sat in a garage and fees just piled on.
now it sits in a barn and fees dont pile on :))
You can thank are idiot gov. Newsom, and he thinks he’ll be President one day.
antarez: The reg fees for California have been higher than most states for many years. This dates back to numerous governors, not just Newsom. So why attempt to turn this into yet another political thing? Let’s go back and talk about Iowa! GOP all the way now. So shall I condemn her and the GOP because of what they do?
Kind of getting sick of people trying to turn EVERYTHING here into politics.
Which is exactly why we finally saw December being a shaky sales month overall. Buyers have reached their limit. I’m just waiting for all those repos to begin like they did in 2008-2009. And kick start that WAY overdue recession already.
Yup, then the big incentives which is when I will buy. Did that in 09 and bought a new Pontiac G-6. After incentives, GM employee discount, and GM card earnings, the finance manager said that it was the most discounted MSRP he had ever seen. I also got a great deal on a new leftover 12 Silverado in 13. Just save your cash so you can buy when the market is right. I have saved many thousands of dollars over the years.
Yeah, did the same on a ’19 Silverado with the 4 cyl turbo. Got it Feb ’20, almost $13k off sticker. Just before covid hit. Still getting dealer calls to buy it back. To get what? The same truck for $10k more and higher interest? I’ll wait…
Wow, I never even had a mortgage payment that big, when I had a mortgage.
Depends greatly where you lived. I’ve never had a mortgage less than 1K/mo when I had a mortgage. I think my first one was near 2K/month due to a rather pricey 14% interest rate in the mid-80’s. And people are complaining about 6% rates today. Its all relative.
Yup, my first one was 11.25% in 84. People today are crybabies.
A friend of mine is a repo guy. He told me he is busy/booked every day. The holding pens are at capacity. The idiot brain dead consumer thinks he/she can make these $700 monthly payments and the banks are still doing their BS, hey, you’re approved for $200,000. Yet, the individual makes 40K a year.
Customer buys car for $750.00 a month;
Customer defaults on loan after 4 months of non payment;
Repo man comes;
Car gone;
Car goes to holding pen until our idiot consumer pays the 4 months defaulted on plus and holding fees (and that’s even if they can)
Bank is holding a car note that no one is paying on.
Vehicle is aging out by the minute while it rots in the holding lot;
Dealer 1 : Consumer 0 : Bank 0
Can’t fix stupid. Told my son, assume everyone is stupid unless they prove you otherwise.
When my children turned 18 I told them to assume everyone is stupid, lying, and/or attempting to rip them off. And that if it sounds good, get it in writing with a signature, before signing yourself.
Some listened. Some learned the hard way that they should have listened.
I can’t even stomach a 500 dollar car payment, let alone 1k.
Unless you rich no one should be in the match debt over a car, even a C8.
Camaro Bro: Amen to that. My payment on my 2023 Bolt is $473/month on a 60 month loan. Even that causes me to feel slightly nauseous.
only a fool would sign up for a $1000. car payment on a depreciating item. All designed to keep you poor and at the mercy of the lousy banks….only buy certified used cars with under 25000 miles. Havent bought a new car since 1999..and with the average car at over $40000. they can keep them all, and the dummies buying these over priced trucks, better brace themselves when it hit the fan. High truck payment, high insurance payments, and they suck gas… i work at an auto auction, and the last 3 months suv and truck prices on the wholesale level are dropping like a stone, you cant give them away. So all these fools that bought at the height of the bubble, good luck!
you havent bought anything it seems. you would know used is more than new right now.
and certified is a SCAM. consider it the original market adjustment. it means nothing and everything qualifies for it now as they keep adjusting the terms to allow for more miles, more wear etc.
but hey, if you want to pay 40k for a used 7 year old vehicle vs 50k for the brand new version… be my guest!
Prices are crazy. My 2014 Silverado WT listed for $29k. Thought that was nuts at time. Same truck now is $39k. Thirty percent increase in ten years!
Yes, my 2012 WT listed for $23,990. I bought it new in May, 2013 for $15,956 out the door. I still drive it daily and it has 87,800 miles now with no rust or problems, it has been a great vehicle. I would like to have a new one but probably can’t get a better one.
This is getting so out of hand 17.9% of buyers over $1,000 per month is insane. The price of GM vehicles is so out of line with what the average income is. Years ago financing was a 36 month agreement then it went to 60 months now it is 72-84 months at over $1,000 per month. Gm blames the price of the car on the workers but that is an absolute false accusation! Less than 10% of the cost is labor. GM only produces high profit trucks and SUV’s in the USA and will continue to cut out any product that doesn’t make them premium profits with lists prices from $75K-$125K. Gm used to be a great American car company, but eventually all vehicles sold by GM will be for the rich or those who wish to overextend themselves with loans they can not afford. Shameful tactics now wonder market share has slipped to record lows for GM.
That’s what happens whenever you allow gov’t to exercise control in the financials of a company. It used to be called fascism but that was redefined to mean ”anyone you don’t agree with”