$1000 Car Payments- Becoming the Norm?

🚗 Affordability tensions at an all‑time high

A whopping 1 in 5 new‑car buyers—19.3%—are now agreeing to monthly payments of $1,000+, the highest share Edmunds has ever recorded, up from 17.7% in Q1 and 17.8% last year edmunds. It seems consumers may be stretching their financial limits to afford that dream ride.

Extended loan terms are becoming the norm

Buyers chasing lower monthly receipts are opting for ever‑longer loans. A record 22.4% of new‑car loans now stretch out 84 months or longer, a notable jump from 20.4% in Q1 and 17.6% a year ago. But remember—longer terms equal more interest and lingering upside-down risk.

Bigger loans, smaller down payments

• Average financed amount: a record $42,388, up from ~$41.5K in Q1 and ~$40.9K in Q2 2024.

• Average down payment has slipped to $6,433, down slightly from both Q1 and Q2 of last year.

So folks are financing more while shelling out less upfront—burger now, steak later?

Deal sweeteners are drying up

• 0% financing deals have dropped to just 0.9% of offers—the lowest since 2004—with only marginal recovery from Q1’s 1% Meanwhile, average APR is hanging high at 7.2%, barely down from 7.3% a year ago 

Few bargains here—monthly relief is costing big in the long game.

Why it matters

Analysts say buyers are maxing out terms and financing to make payments hit their target—but that comes with hidden costs: more interest, slower equity buildup, and higher risk of being underwater if you trade early.

 As Joseph Yoon from Edmunds reminds us: “if a 60‑ or 72‑month term doesn’t work, leasing might be a smarter move” to avoid getting buried in debt.

Final take

Q2 2025 shows a market under pressure—buyers are coping with sticker shock and rising rates by extending terms and borrowing more. But the long‑term cost? It could be steep. If you're thinking $1K/month is the sweet spot now, make sure you know what that stretch means in the big picture (interest paid, equity lost, and potential trouble down the line).