Never Mind Avocado Toast—People Are Paying $1000 Monthly For Their Car
Key Points
- New data shows that more than 20 percent of Americans financing a new vehicle are now paying at least $1,000 per month, a record share driven by high prices and borrowing costs.
- Buyers are increasingly relying on larger loan balances and longer terms, with nearly one in five new-car loans stretching to 84 months or more to keep monthly payments manageable.
- The new-car market is becoming more concentrated among higher-income households, while lower-income buyers continue to exit as affordability pressures push them toward used vehicles or out of the market entirely.
Affording a vehicle has officially become a crisis for a growing share of American buyers, and new data from Edmunds helps explain why.
By the end of 2025, more than 20 percent of shoppers financing a new vehicle were making monthly payments of at least $1,000, a threshold that would have been considered extreme not long ago—it's still extreme, actually, do not let that Overton window shift and allow this to become normalized— but is now increasingly common.
The report reveals that 20.3 percent of financed new-vehicle transactions in the fourth quarter of 2025 carried four-figure monthly payments, the highest share ever recorded. The figure rose steadily through the year, up from 18.9 percent in the same quarter of 2024.
Aside from the eye-popping payments being made by a fifth of all car buyers, the average monthly payment on financed new-vehicle purchases reached a new all-time high of $772 in Q4 2025, compared to $754 in the same period last year. Meanwhile, the average amount financed climbed to $43,759.
The market is being shaped by inflated vehicle prices and increased borrowing costs. When you pair that with the current economic climate, you end up with buyers stretching their finances just to stay in the new-car market.
The pressure isn’t limited to new vehicles. Used-car buyers also set a record, with 6.3 percent agreeing to monthly payments above $1,000, which has to be bordering on some kind of insanity. Higher used-car prices, combined with interest rates that averaged more than 10 percent in the fourth quarter, pushed payments into territory once reserved for exotic vehicles.
What's worse, nearly 21 percent of new-car buyers in the fourth quarter signed loans lasting 84 months or longer. While that share dipped slightly from the previous quarter, it remains far above pre-pandemic norms and well ahead of where the market stood just a year earlier. Extended terms reduce monthly payments but leave buyers exposed to higher total interest costs and longer periods of negative equity. Zero-percent financing remained rare, accounting for just over 3 percent of loans.
Data from Cox Automotive shows that since 2019, new-vehicle sales among households earning $150,000 or more have climbed sharply, while buyers earning under $75,000 have largely disappeared from showroom floors.
Automakers, responding to where demand remains strongest, continue to emphasize higher-margin trucks, SUVs, and premium trims—awesome, thanks everyone!
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, went over the wall during the Rolex 24, and wrenched in the intense IndyCar paddock.
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Even if I could afford it I don't think I would purchase a new car. They are obscenely overpriced and that idiot at Ford is quite happy with the situation. He would rather sell one ultra expensive truck (who the heck wants or needs a truck in the city?) than 3 relatively affordable trucks.
I dunno, maybe leasing is the way to go? At least you could dump the thing after a few years.