New car buyers pay more than $1,000 per month

In the third quarter, more than 17% of buyers paid four-digit monthly car bills, and 18% had car loan terms of 84 months

The average price of a new car in the United States this year is $48,000, but what matters to buyers is not the MSRP or trade-in price of a new car, but the amount of cash flowing out of the bank each month to pay for the new car. For one in six U.S. drivers, that number reaches a staggering four digits.

New data comes from edmonds It was revealed that in the third quarter, 17.4% of buyers paid at least $1,000 per month on their car loans, which is almost a quarter of the average American salary.

RELATED: The average new car costs $48,000, but buyers only want to spend $35,000

This is not a flash in the pan, but a continuation of an existing trend. Results from July to September show that more than 17% of buyers took out loans of more than $1,000 for six consecutive quarters.

To make new cars more affordable, dealers and buyers are increasingly turning to long-term 84-month payment plans. This wait lasts seven years. Unless you bought the car when it was released, it would have gone through two facelifts and probably been completely replaced by the time you paid off your debt. You could be at risk for some nasty repair and out-of-warranty bills over the next few years, depending on your coverage.

Average U.S. auto loan, Q3 2024

edmonds Said that 18.1% of buyers applied for 84-month loans in the third quarter of 2024, up from 17.3% in the second quarter and 15.8% in the first quarter. In contrast, the number of buyers applying for 60-month loans has remained steady at around 69%, suggesting that affordability issues caused by high interest rates averaging 7.1% do not affect middle- and high-income earners as much as they do those in lower-wage jobs. .

Don’t think used car buyers can get away with this ordeal. Sure, they spend less each month ($546 on average), but they’re hit hard by loans with annual interest rates of 11.3%.

How much do you pay for your car each month? Leave a comment below and let us know how much financial pain you’re experiencing and whether it’s worth it.

Quarterly used car finance data (average)

Quarterly new car finance data (average)