Jun 30, 2022 - Economy & Business

$1,000+ a month for new vehicles: Car payments "look more like mortgage payments"

Pickup trucks sitting in a row on a rainy dealership lot
U.S. new-vehicle borrowers in the second quarter agreed to average monthly payments of $672 over 70.3 months. Photo: Daniel Acker/Bloomberg via Getty Images

Four-digit monthly car payments are becoming increasingly common as new-vehicle prices and interest rates spike.

Driving the news: 12.7% of buyers who financed their new vehicles in June agreed to monthly payments of at least $1,000, the highest level ever, car research site Edmunds reported Thursday.

  • That's up from 7.3% in June 2021 and 4.6% in June 2019.
  • 36.1% of borrowers opted for loans of 73–84 months, up from 32.8% in June 2021.

The big picture: Supply chain issues and other inflationary pressures have made new and used cars, pickups and SUVs more expensive than ever.

  • New-vehicle prices are averaging more than $47,000.

By the numbers: The average new-car borrower agreed to a monthly payment of $672 in the second quarter on an average loan length of 70.3 months with a 5% interest rate, according to Edmunds.

  • The average borrower put $40,602 on their tab.

What they're saying: "Although there appears to be a steady stream of affluent consumers willing to commit to car payments that look more like mortgage payments, for most consumers the new car market is growing increasingly out of reach," Jessica Caldwell, Edmunds’ executive director of insights, said in a statement.

Go deeper