The $1,000-a-Month Car Payment Is Now a Reality for 1 in 5 New-Car Buyers

The cost of buying a new car continues to put pressure on Americans’ budgets, and new data shows just how much buyers are willing to spend to get behind the wheel.

New-car buyers borrowed record amounts during the third quarter of 2026, with more people taking out longer loans and committing to higher monthly payments, according to an Edmunds report published Thursday, October 1.

Edmunds is a California-based automotive research and shopping website that helps consumers compare vehicles and prices.

Per the report, the average amount financed for a new vehicle climbed to $44,664, up from $42,744 during the same period last year. The average monthly payment also increased to $787, compared with $756 a year earlier.

More buyers are committing to monthly payments of $1,000 or more. That group accounted for a record 21.2% of financed new-vehicle purchases, up from 19.1% in the third quarter of 2025. Used-car buyers are also facing higher payments, with a record 6.5% paying at least $1,000 a month.

To make monthly payments more manageable, buyers are also extending their repayment periods. Edmunds found that 25.5 percent of financed new-vehicle purchases involved loans lasting 84 months or longer, compared with 21.8 percent a year earlier. That’s more than one in four buyers agreeing to make payments for at least seven years.

Jessica Caldwell, Edmunds’ head of insights, explained buyers haven’t backed away despite the strain.

“Instead of sitting on the sidelines, consumers are adapting: They’re allocating more of their household budgets to their vehicles, stretching out their loan terms, and becoming more proactive about shopping around for financing to find ways to make the numbers work,” she said, per the release.

The average total interest paid over the life of a new-car loan reached a record $9,938, up from $9,442 a year earlier, despite the average annual percentage rate remaining steady at 7 percent.

Ivan Drury, Edmunds’ director of insights, cautioned buyers against focusing only on what they can afford each month.

“Stretching out a loan shouldn’t be a way to talk yourself into a vehicle that doesn’t make sense for your budget when you look at the total cost,” Drury stated in the report.