More Americans Than Ever Are Stuck With $1,000-Plus Car Payments

For a growing share of drivers, car payments are starting to resemble rent.

A record number of U.S. car buyers are now committing to four-figure monthly payments, according to new data from Edmunds. By the end of 2025, 20.3% of financed new-vehicle purchases came with a monthly bill of $1,000 or more — up from 18.9% a year earlier and the highest share ever recorded.

Used-car buyers are hitting records, too, with about 6% now facing monthly auto loan payments of at least $1,000.

To be clear: Not every car buyer is paying $1,000 a month, but nearly everyone is paying more. The average monthly payment on a financed new vehicle reached a record of $772 at the end of 2025, an increase from $754 just a few months earlier.

To keep a new or used car within reach, buyers took on larger loans and longer terms — a trend that Ivan Drury, Edmunds’ director of insights, said in the report “reflects the financial strain many buyers faced throughout the year.”

For most Americans, cars aren’t a nice-to-have amenity — they’re a daily necessity. In suburbs and small cities with little to no public transportation, or for families juggling commutes and school drop-offs, skipping a vehicle isn’t an option. But that necessity now comes with a steep price tag that’s forcing many buyers to take on debt.

The strain is already showing up in missed payments. Auto loan delinquencies have climbed to record highs, with a growing share of borrowers falling at least 60 days behind on their bills — a sign that rising monthly costs are pushing some drivers past what they can realistically afford.

With new cars costing more upfront — the average price paid for a new vehicle hit an all-time high of $50,326 in December, according to Kelley Blue Book — many buyers have little choice but to borrow more. And Edmunds’ data shows shoppers are financing more than ever. The average new-vehicle loan climbed to $43,759, up from $42,647 earlier in the year, with longer repayment terms to help spread out the cost.

Loans lasting 84 months or more made up nearly 21% of new vehicle purchases — down slightly from earlier in the year but still well above the 17.9% share seen a year earlier.

For many households, that combination can turn an unavoidable expense into a long-term financial burden.

Still, there are signs that 2026 could bring some relief. Drury notes in the report that while high prices and economic uncertainty are still weighing on buyers, new-vehicle prices are beginning to stabilize as improved supply and softer demand reduce upward pressure on car prices.

Other analysts predict interest rates may ease modestly in 2026, potentially giving shoppers more affordable options. Still, industry experts stress that it can take months for Federal Reserve policy changes to show up in auto loan rates. As Cox Automotive’s interim chief economist Jeremy Robb noted to Kelley Blue Book, “because the Fed’s primary policy tool operates with a lag, material auto-loan relief will likely come in the spring or later.”