Car payments just hit a record $787 a month—and 1 in 4 new-car buyers is now signing a 7-year loan
Source: Fortune ·
New-car payments, loan sizes and lifetime interest all set records last quarter, even with rates flat at 7%. Six-figure households are still buying. Everyone else is getting squeezed.
From the source
American drivers face a daunting market. The average monthly payment on a financed new car hit a record $787 in the third quarter, according to Edmunds, up from $777 in the second quarter and $756 a year earlier. Buyers are also borrowing more than ever. The average amount financed climbed to a record $44,664, while the average new vehicle sold for $50,562 in September, per Kelley Blue Book, just $52 shy of the all-time high. Nationwide, auto loan balances reached $1.71 trillion in the second quarter, according to the New York Fed, roughly 56% more than a decade earlier. For Joseph Yoon, consumer insights analyst at Edmunds, the math is brutally simple: Vehicle prices sit near record highs, and interest rates remain stubbornly elevated, with the average new-car APR holding at 7%. “Mix those things together and then you get record-high monthly payments,” Yoon told Fortune. “Just how the math works out.” The road that led to record car payments So how exactly did we arrive here? Yoon…
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