Despite declining interest rates, the average amount of money borrowed and the average monthly payment for new car loans reached all-time highs in the fourth quarter of 2024. That’s according to newly released data from Edmunds, which says 18.9 percent of car buyers with new car loans – almost one in five – have a monthly payment of $1,000 or more.
“Although they tend to skew a bit higher at year-end, the record highs in auto financing amounts that were set in Q4 are the culmination of major challenges to new-vehicle affordability that consumers faced in 2024,” said Jessica Caldwell, Edmunds’ head of insights. “It’s getting more and more difficult for the average shopper to walk into a new-car dealership and leave with a set of keys without feeling like they are forced to create extra room in their budget from some other aspect of life. The one bright spot is that interest rates seem to finally be on a downward trajectory, so buyers are at least getting more car for their buck rather than allocating their payments to interest.”
The research shows that the average new car loan in Q4 2024 had a 68.8-month term, a $754 monthly payment, and a 6.8 percent APR. The average amount financed was $42,113, and the average down payment was $6,856. Those monthly payment and amount financed numbers are record highs, but the APR and down payment stats decreased slightly compared to Q4 2023.
So, what can car buyers do to save a few bucks at the dealer and in their monthly budgets?
“For longstanding new-car buyers coming back to the market for the first time in years, used purchases and new EV leases are your best bets to keep your monthly payment in line with what you were accustomed to in pre-pandemic times,” said Ivan Drury, Edmunds’ director of insights. “Going down either route presents traditional new-car shoppers with a couple of options: sticking with what you know — buying a used car similar to your current one but with some upgraded features — or embracing the future with an electric vehicle.”
Although APR is higher with a used car loan – 11.0 percent, on average – the amount borrowed, monthly payment, and down payment are all much lower than the same statistics for new car loans. In fact, the average monthly payment for a used car loan went down in Q4 2024 compared to the same period a year earlier. Interestingly, the average used car loan has a term of 69.5 months, which is longer than the average new car loan.
Comments
“For longstanding new-car buyers coming back to the market for the first time in years, used purchases and new EV leases are your best bets to keep your monthly payment in line with what you were accustomed to in pre-pandemic times,” <— So basically, your right to freedom of mobility will now become a luxury reserved for the rich only and your options are buy second hand or don’t own at all and lease an EV instead. Please remind me how there is no agenda here to intentionally push most Americans from owning an automobile and into a future where nothing is owned and “we will be happy.”
We are long overdue for an economic crash. Unless that happens everyones brains will be in the sky along with their monthly payments.
And I find it ironic that Edmunds is suggesting going electric when they (too expensive EVs) are one of the biggest contributors to the problem. Remind me again why a Blazer needs to cost $46k base price just because it has a battery? People want cars they can afford and the more they push this EV agenda the less people will give a damn about the environment and resent the idea of not having affordable mobility. Its already happening. Many Blazer EVs near me are selling for insane discounts because nobody wants to spend more for less capability. But they want to blame the people for choosing affordability over the environment.
Give it 18 months and the economy will be garbage again. The problem with GM, as well as Ford, is they have no cars and nothing cheap. There might be big layoffs in the domestic auto industry. People cannot afford $50k cars, especially if they’ve just lost their job and have a mortgage and property taxes to pay.
I, for one can’t believe that the market has held on this long. These prices are out of control!! $100K trucks and suv’s is ridiculous. And the fact that people are paying these interest rates, along with longer term loans just shows how far we have slipped in society with money management!! It should really be a class offered in HIGH SCHOOL!!!
Paying more for vehicles than what we did for homes is going to really cause some problems, as both the economy & people are eventually going to have to crash & burn. Throw in the current increasing insurance rates & who is going to have any money left for groceries??
Joe G.
Property taxes , mortgage, and don’t forget fire insurance. Mine went from 3K to 7K!
As close to debt free is where you want to be.
I am looking to live under a bridge with a view and eat government cheese once the tariffs kick in.