Almost 20% Of Buyers In Q4 Have Over A $1,000 Car Payment

Edmunds is sharing the latest auto financing data from the fourth quarter. It shows that 1 in 5 new-car shoppers committed to a $1000+ monthly car payment in Q4 2024.  The average monthly payment and average financed for new-vehicle purchases both hit all-time highs in , despite declining interest rates.

New data from Edmunds reveals: 

• New-car shoppers are taking on $1,000+ monthly payments at record levels:  Analysts say the share of consumers taking on loans with new-vehicle monthly payments of $1,000 or more was 18.9% in Q4 2024, an all-time high, according to Edmunds' records.
• New-car shoppers are taking out bigger loans than ever before. The average amount financed for new-vehicle purchases in Q4 was $42,113 in Q4 2024 — an all-time high, according to Edmunds records — compared to $40,713 in Q3 2024 and $39,977 in Q3 2024. 
• Finding (or qualifying for) 0% finance deals remains nearly impossible. 0% finance deals accounted for just 2.4% of all new financed vehicle purchases in Q4 2024, compared to 3% in Q3 2024 and 2.3% in Q4 2023. Edmunds analysts note that even if buyers are able to find a 0% finance offer, they'd still have to qualify with excellent credit, which is a challenge for many consumers. 
• Interest rates remain historically high — but there are encouraging signs of a downward trend. The average new-vehicle APR in Q4 2024 dipped to 6.8% in Q4 2024, compared to 7.1% in Q3 2024 and 7.4% in Q4 2023. Edmunds data shows that consumers with loan terms of 67 months or greater saw a quarterly decline in average APRs, dropping to 7.8% in Q4 2024 compared to 8.3% in Q3 2024. (Between Q2 2023 and Q3 2024, average APRs for loans of 67+ months consistently stayed above 8%.) Edmunds analysts note that this decline is a positive sign for more price-sensitive buyers, who are likely stretching out their loan terms to reduce monthly payments. 

"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."

If you're looking for more affordable options in 2025, Edmunds analysts advise car shoppers to consider changing up their buying habits. 

"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." 

Edmunds Quarterly New-Car Finance Data
(Averages)

Edmunds Quarterly Used-Car Finance Data
(Averages)

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