Data shows car buyers are putting less money down and turning to longer loan terms at record levels as affordability pressures persist
Santa Monica, Calif.—New vehicle financing trends in Q1 2026 show car buyers continuing to take on larger loans while adjusting how they structure deals to keep monthly payments manageable, according to the latest analysis from Edmunds.
Edmunds’ Q1 2026 data on financed purchases shows:
- Consumers are financing more than ever to buy new vehicles. The average amount financed for new vehicles climbed to a record high of $43,899 in Q1 2026, compared to $43,759 in Q4 2025 and $41,473 in Q1 2025.
- Monthly payments for new vehicles reached a new all-time high. The average monthly payment on financed new-vehicle purchases rose to $773 in Q1 2026, edging past $772 in Q4 2025 and up from $741 a year ago.
- $1,000+ monthly payments remain persistently high. The share of new car buyers committing to monthly payments of $1,000 or more accounted for 20% of all financed new-vehicle purchases in Q1 2026, nearly flat from 20.3% in Q4 2025 but up from 17.7% in Q1 2025. For used vehicles, 5.3% of buyers committed to $1,000+ monthly payments, down from 6.3% in Q4 2025 but up from 4.9% a year ago.
- Buyers are putting less money down to manage upfront costs. The average down payment for new vehicle purchases fell to $6,206 in Q1 2026 — one of the lowest first-quarter levels since 2022 — compared to $6,228 in Q4 2025 and $6,511 in Q1 2025.
- Extended loan terms reached a record high, underscoring buyers’ growing reliance on longer loans to manage monthly costs. Edmunds data shows that 84-month or longer loans made up 22.9% of financed new car purchases in Q1 2026 — an all-time high — compared to 20.8% in Q4 2025 and 21.2% in Q1 2025.
- Interest rates remained elevated for new car shoppers. The average annual percentage rate (APR) for new vehicle purchases was 6.9% in Q1 2026, up from 6.7% in Q4 2025 but down from 7.1% in Q1 2025. Edmunds analysts note that promotional financing remained limited: Just 2.6% of new-vehicle loans carried a 0% rate, compared to 3.1% in Q4 2025 and 1% a year ago.
“Q1 financing data shows that car buyers are getting creative just to keep their purchases within reach,” said Jessica Caldwell, Edmunds’ head of insights. “As loan amounts and monthly payments continue to climb to record levels, consumers are having to work harder to make the numbers fit — a clear sign of how strained affordability has become.”
Edmunds analysts say this is playing out most clearly in how buyers are structuring their financing.
“Right now, consumers are picking their battles when it comes to affordability,” said Ivan Drury, Edmunds’ director of insights. “While a larger down payment is typically the better financial move, many buyers simply don’t have that flexibility in today’s market, especially if it means diverting funds away from more immediate needs. In those cases, extending the loan term can help achieve a similar monthly payment, but it often comes with higher long-term costs and added financial risk.”
As affordability challenges persist, Drury says some shoppers may find more viable options outside the new car market.
“For shoppers who are struggling to make the numbers work on a new vehicle, the used market could offer more opportunity in the months ahead,” said Drury. “As more off-lease vehicles return to the market, we expect inventory to improve, which could help ease pricing and give buyers more flexibility.”
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