- The average monthly new-car payment rose to $806 last month.
- Nearly one in five finance customers is paying more than $1,000 a month.
- Loans of 84 months or more accounted for nearly 13 percent of sales in March.
New data paints a bleak picture for car buyers. The average monthly new-car payment rose to $806 in March, with nearly one-in-five finance customers paying more than $1,000 a month.
A majority of those customers paying $1,000 or more bought premium models and pickups. According to JD Power, mainstream non-pickup truck buyers accounted for only 9.3 percent of all loans of $1,000 or more last month.
One contributor to the rising monthly payments, beyond the price tag, was negative equity. This is where a customer has a trade-in with a loan balance that exceeds the vehicle’s value. This shortfall is often rolled into a new loan, raising the payment.
Automakers And Banks Win, You Loose
In March, nearly one-third, 31.2 percent, of used-vehicle trade-ins carried negative equity. That is up from 26 percent in 2025 and 24 percent in 2024. To combat this, customers are taking out longer loans, which can result in a lower monthly payment while paying more interest to the bank.
Loan terms are also increasing. The data and analytics firm reported that loans for 84 months or more accounted for nearly 13 percent of all new-car sales in March, and of those, 34.1 percent were for trucks, despite accounting for just 18.4 percent of sales.
Seventy-two-month loans have also become more popular, representing 40.5 percent of sales.
The data also showed that those with longer loan terms were more likely to return to the market than those with shorter terms. According to JD Power, 20 percent of all new-car buyers went shopping for another new model within three to four years. That percentage jumps to 44.6 percent for those with 84-month loans.
Motor1’s Take: We don’t expect new car prices to decrease anytime soon, and monthly payments will reflect that. Extending the loan terms might lower the monthly payment, but that comes at a cost that more and more people are willing to pay if they want a new vehicle.
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