Record Share of Car Buyers Commit to $1,000 Monthly Payments

A record share of consumers who financed a new car purchase in the fourth quarter of 2025 signed up for monthly payments of $1,000 or more, according to a new report from automotive information company Edmunds. And the trend will likely continue into 2026.

More than 1 in 5 (20.3%) of new-car buyers financed their purchase and elected to go for monthly car payments of $1,000 or more in the fourth quarter of 2025. That’s an increase compared with data from the third quarter in 2025 (19.1%) and the fourth quarter in 2024 (18.9%), according to the report.

New car buyers weren’t the only ones signing up for large monthly payments last year. Edmunds reported that 6.3% of used car buyers committed to monthly payments of $1,000 or more in the fourth quarter. That represents an increase over 2025 third quarter figures as well as over numbers for the final quarter of 2024.

More than 20% of people who took out a loan for a new vehicle purchase in the fourth quarter of 2025 committed to monthly payments of $1,000 or more.

Another record high for the fourth quarter was how much new car shoppers borrowed on average. That figure topped $43,750, an increase of more than $1,000 over the average car loan amount in the prior quarter.

The swelling loan sizes and monthly payment amounts are partly a sign of rising prices in the new vehicle market. In September, the average U.S. transaction price or a new vehicle soared to more than $50,000 for the first time, according to Kelley Blue Book.

Subprime Delinquencies On the Rise

Loans with longer terms help consumers keep their monthly auto costs down, and that appears to be exactly the step they took in 2025. Edmunds data reveals that nearly 21% of loans for new cars in the fourth quarter were for 84 months or longer.

While more affordable to borrowers, lengthier loan terms can expose subprime lenders to more risk.

A new report on the state of auto loan payments in the U.S. indicates that subprime borrowers are experiencing their share of troubles when it comes to keeping up with their car payments.

Data from Fitch Ratings reveals that subprime auto delinquencies rose to 6.65% in October, which is a record mark in the series that dates back more than 30 years, according to the report.

Though prices for new vehicles remain elevated, they may stabilize in 2026, according to Edmunds.

Lenders shouldn’t be surprised that high monthly payments and longer terms have caused more people to fall behind on their car payments. 

Ivan Drury, Director of Insights at Edmunds, said in the company’s report that, although affordability pressures still exist in 2026, early signs of rebalancing are emerging.

“New vehicle prices remain high but are beginning to stabilize; lower interest rates could offer some relief for both new and used vehicle shoppers, and an increase in off-lease returns is expected to provide more affordable alternatives in the used market,” Drury said.

Until car prices come down, subprime lenders may see growing demand for high-value auto loans. But creditors who offer financing to subprime borrowers should consider that more people may fall behind on their auto loan payments as the year unfolds.