More Than 20% Of New Car Loans Were Over $1,000 Per Month At The End Of 2025

New cars are mighty expensive right now. With a current average transaction price of $49,955, according to Automotive News, they're about as expensive as they've ever been, and that's causing buyers to reach deeper into their pockets when it comes to monthly payments. At the end of 2025, more than one-in-five new car buyers were spending over $1,000 per month on their car payments. That's not great for buyers' wallets right now, and it's probably not sustainable for the long-term, either.

New data says that a record high of 20.3% of all financed new-vehicle purchases in the fourth quarter of 2025 crested $1,000 monthly payments, according to Edmunds. That's up from 19.1% in Q3 of 2025 and 18.9% in Q4 of 2024. Hell, things are even bleak for used car buyers, with 6.3% of them somehow managing to spend over a grand a month on their purchases — up from 6.1% in Q3 and 5.4% in Q4 of 2024.

Unfortunately, this seems to be a rising tide lifts all ships situation. The average monthly payment on new-vehicle purchases hit a new all-time high of $772 in the fourth quarter of last year — that's up $18 from the preceding quarter. It certainly makes sense, though. Shoppers are financing more than they have in the past. The average amount financed for new-vehicle purchases in Q4 climbed to $43,759. That's up $1,112 from the previous quarter and a more than $1,600 increase from the same time a year prior. Things are getting mighty troubling, folks.

It's not just the monthly price on these loans that are up — lengths are also increasing, and this is the one time I'm not jealous of that. Edmunds says that 84-month or longer loans made up 20.8% of all finance deals in Q4 of 2025. Technically, that's slightly down from the 22% it hit in the third quarter, but it's still up from the 17.9% rate these loans were at in Q4 of 2025. It shows customers are willing to pay more money over a long period of time if it means the monthly payments are a bit more bearable. I'm sure there are some people out there with 84-plus-month loans who are also spending over $1,000 every time, and I am praying for them.

There is a tiny bit of good news to be found in Edmunds' data dump. Apparently, the average annual percentage rate (APR) for new vehicle purchases dipped slightly at the end of 2025, hitting 6.7%. That's down from the 7% it was at in Q3 and the 6.8% it hit in Q4 of 2024. Still, don't celebrate too much, because it's near historically high levels nonetheless. Buyers also weren't helped by the typical sort of year-end financing deals we're so used to seeing, according to Edmunds. In Q4, just 3.1% of new-vehicle loans carried a 0% interest rate — down from 3.3% in the third quarter.

Obviously, we're just a few days into 2026, so it's far too early to tell how the buying market will shape up for this year, but I don't have much hope. Unless some sort of cataclysmic world event strikes (hey, ya never know), I sort of expect car prices to steadily climb, especially as automakers frog-in-boiling-water tariff price increases onto consumers. If more buyers stop being able to pay these loans back, which is something that is happening at an alarming rate, we might be looking at a Housing Crisis II: This Time It's Cars.