Nearly 1 in 4 New-Vehicle Buyers in Q2 Stretched Loans to 84 Months or Longer, a Record According to Edmunds

Edmunds data shows car buyers are also reducing down payments and financing record amounts but still paying record average monthly payments

SANTA MONICA, Calif., July 01, 2026 (GLOBE NEWSWIRE) -- Multiple new-vehicle financing trend lines reached new peaks in Q2 2026 as shoppers took on larger and longer loans to combat affordability challenges in the car market, according to the latest analysis from Edmunds.

Edmunds’ Q2 2026 data on financed new-vehicle purchases shows:

• Buyers are lengthening their loans past 72 and 84 months at record levels: A record 36.5% of all financed new-vehicle purchasers in Q2 took on a loan of 73 months or longer, up from 27.3% a decade prior. 23.9% of Q2 financers signed on for loans of 84 months or longer, another record.
• Monthly payments reached an all-time high for the third consecutive quarter: The average monthly payment on new-vehicle purchases hit a new record of $777, slightly above last quarter’s record of $773. Average monthly payments crossed the $700 mark for the first time in Q3 2022 and have generally remained flat or ticked upward since.
• Consumers have never financed as much on a vehicle purchase as they did in Q2: The average amount financed for a new-vehicle purchase climbed to a new all-time high of $44,156, up $257 from Q1 and $1,768 from Q2 of last year ($42,388).
• Meanwhile, shoppers are putting less money down: The average down payment on a new-vehicle purchase continues to sink, dipping to $5,815 in Q2 from $6,206 a quarter ago and $6,433 a year ago, even as new-vehicle prices have risen in that span. Down payments represented just 11.6% of the average total purchase in Q2, the lowest share since Q3 2020.
• The share of monthly payments averaging $1,000 or more matched an all-time high at 20.3%: One in five (20.3%) new-vehicle financers in Q2 took on monthly payments of $1,000 or more, tying the record mark from Q4 2025 and up slightly from last quarter’s figure of 20.0%. 
• Total interest paid reached a new record as interest rates remain elevated: The average total amount of interest expected to be paid over the life of a new-vehicle loan climbed to a record $9,811 for new-car loans established in Q2, up from $9,592 last quarter and $9,616 a year prior. The jump comes amid continued heightened APRs, which ticked back up to 7.0% in Q2.
• Zero percent financing has all but vanished: Just 1.2% of new-vehicle buyers secured a 0% APR loan in Q2, down from 2.6% in Q1. The share peaked at 24.2% in Q2 2020 amid pandemic-era incentives and has not reached 4% share since Q4 2021.
• Used-vehicle buyers are feeling the squeeze too: The share of used-car purchases with monthly payments of $1,000 or more rose to a record 6.3% in Q2, while the average amount financed for a used vehicle climbed to $30,414, up from $29,080 in Q2 2025.

“The Q2 data perfectly illustrates the stark reality of today’s new-vehicle market: Affordability is such a massive hurdle that buyers are forced to stretch their budgets to the absolute limit just to get into a new vehicle,” said Jessica Caldwell, Edmunds’ head of insights. “When you see loan terms extending to record lengths, down payments shrinking, and monthly payments hitting all-time highs, you’re looking at a clear recipe for long-term financial strain.”

“Unfortunately, this is the new normal for new-car buyers. Until we see a major shake-up in automaker incentives, a meaningful drop in interest rates, or a shift toward a more affordable mix of vehicles — none of which appear to be on the horizon — consumers will have to keep walking this financial tightrope.”

Edmunds analysts stress that the continued lengthening of the term of car loans presents challenges and risks, including financial disadvantages over the long haul of a loan.

"Car shoppers are caught in a dangerous practice of focusing heavily on their monthly payment while ignoring the potential long-term damage to their wallets,” said Ivan Drury, Edmunds’ director of insights. “Pushing loan terms past six or seven years might make an average monthly payment more digestible today, but it’s a mathematical trap. When you pair a 7.0% APR with an 84-month loan and a smaller down payment, you’re signing up to hand over nearly $10,000 on average in interest alone. Unfortunately, stretching out the term to be able to swallow a higher-priced vehicle guarantees you'll be building equity at a snail's pace, leaving you highly vulnerable to falling underwater when it's time to trade in."

To avoid these financing traps, Edmunds analysts advise car shoppers to look beyond the monthly payment and carefully weigh the long-term cost of debt. Utilizing tools like the Edmunds Auto Loan Calculator allows consumers to stress-test different scenarios by adjusting variables like down payments, interest rates, and loan lengths before setting foot in a dealership. The Edmunds Car Loan Interest (APR) Calculator can serve as a useful reality check, mapping out exactly how much hard-earned cash will be eaten up by interest over the lifespan of the loan based on the chosen term.

Check out edmunds.com/car-payments/ for a look at changes in monthly payments for new and used vehicles on a monthly basis, along with a state-level map view of average payments across the country.

Quarterly New-Car Finance Data
(Averages)

Quarterly Used-Car Finance Data
(Averages)

About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Newsweek, Fortune, Great Place to Work and Built In, Edmunds is based in Santa Monica, California. Follow us on TikTok, Twitter, Facebook and Instagram.

Mitch Paul
Edmunds
310-491-8738
pr@edmunds.com

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