Healthy Food Delivery : New Car Payments Just Hit a Record High of $777 a Month

Tuesday, July 7, 2026

New Car Payments Just Hit a Record High of $777 a Month — Here’s Why

It’s no secret that everything is getting more and more expensive. Americans now have over $1.6 trillion — yes, trillion, with a T — in car debt. Pricier cars mean larger down payments, larger loans, and larger monthly payments. According to Edmunds, for the third quarter in a row, the average new vehicle monthly payment just hit a new high of $777. Additionally, more and more buyers are opting for longer loan repayment plans. Nearly a quarter of new vehicle buyers are on an 84-month or longer repayment plan.

Why Is the Average New Vehicle Monthly Payment So Expensive?

Edmunds found several factors are contributing to high monthly payments. First, while the prices for new vehicles continue to rise, “the average down payment on a new-vehicle purchase continues to sink.” The average amount financed for a new-vehicle purchase has reached $44,156 (a new all-time high), while the average down payment dropped to $5,815.

This mismatch in down payment versus amount financed plays a large role in the rise in average payments, but interest rates have an effect as well. Edmunds found only “1.2% of new-vehicle buyers secured a 0% APR loan in Q2, down from 2.6% in Q1.” To give that number additional context, “the share [of buyers who secured a 0% APR loan] peaked at 24.2% in Q2 2020 amid pandemic-era incentives and has not reached 4% share since Q4 2021.” Overall, the average interest buyers pay over the life of the loan “climbed to a record $9,811,” while APRs “ticked back up to 7.0% in Q2.”

Why Are Buyers Opting for Longer Loans?

With those numbers for context, the trend of longer loans starts to make sense. Sure, higher APRs mean a more expensive loan if you pay it off in 84 months instead of 60, but when there’s an average difference of nearly $40,000 between the down payment and the size of the loan, many buyers seem to be willing to make the trade to lower their monthly payments wherever possible.

Edmunds found that “36.5% of all financed new-vehicle purchasers in Q2 took on a loan of 73 months or longer…[and] 23.9% of Q2 financers signed on for loans of 84 months or longer.” Both of these numbers represent new records.

What Does This Mean for Me?

If you’re in the market, you might want to consider a used vehicle. Edmunds found that they’re also more expensive that in previous years, but they may still be cheaper than a new one. If you are committed to a new vehicle; take extra time to run the numbers. A longer loan isn’t the end of the world, but it is more expensive in the long run so before you sign up for that make sure it makes sense for your budget.