New Vehicle Buyers Opt for Longer Loans Amid Rising Prices
24% of new car buyers opted for 84-month-or-longer loans in Q2 2026, a record high, as average new vehicle prices hit nearly $52,000.
Key Takeaways
- 24% of new car buyers opted for 84-month-or-longer loans in Q2 2026, a record high.
- Average new vehicle prices hit nearly $52,000, a new record.
- 36.5% of buyers opted for loans of 73 months or longer, up from 27.3% a decade ago.
- Average new car payment averaged $777 in Q2 2026.
- Buyers are putting less money down, with the average down payment at $5815, down from $6433 last year.
What’s Driving the Trend Towards Longer Loans?
The rising cost of new vehicles is a major factor, with prices hitting a record high of nearly $52,000. To make monthly payments more manageable, buyers are opting for longer loan terms.
This trend is not new, but it has accelerated in recent years. According to Edmunds, the rate of customers opting for loans of 73 months or longer has increased significantly, reaching 36.5% in Q2 2026.
How Are Buyers Affording These Longer Loans?
Buyers are borrowing more money to finance their purchases, with the average buyer financing about $44,156, up from $42,388 just one year ago.
Additionally, buyers are putting less money down, with the average down payment at $5815, down from $6433 last year. This means that buyers are taking on more debt to purchase a new vehicle.
What Are the Consequences of Longer Loans?
Stretching out loan terms can make monthly payments more manageable, but it can also lead to long-term financial strain. According to Ivan Drury, Edmunds’s director of insights, “When you pair a seven-point-oh percent APR with an eighty-four-month loan and a smaller down payment, you’re signing up to hand over nearly ten thousand dollars on average in interest alone.”
How Does This Affect the Used Vehicle Market?
The trend towards longer loans is not limited to new car buyers. Used vehicle purchases during Q2 also showed some startling trends, with used vehicle payments over $1000 a month reaching a record 6.2%.
Specifications
| Specification | Value |
|---|---|
| Average new vehicle price | $51,995 |
| Average new car payment | $777 |
| Average down payment | $5,815 |
| Average loan term | 84 months or longer |
Frequently Asked Questions
Q: What is driving the trend towards longer loans?
A: The rising cost of new vehicles is a major factor, with prices hitting a record high of nearly $52,000. To make monthly payments more manageable, buyers are opting for longer loan terms.
Q: How are buyers affording these longer loans?
A: Buyers are borrowing more money to finance their purchases, with the average buyer financing about $44,156, up from $42,388 just one year ago.
Q: What are the consequences of longer loans?
A: Stretching out loan terms can make monthly payments more manageable, but it can also lead to long-term financial strain.
