A record share of automotive borrowers took out extra-loan terms in the second quarter as average monthly payments also reached all-time highs.   

Thirty-seven percent of new-vehicle buyers signed onto loans of at least 73 months in the second quarter, according to Edmunds, and 24% took out 84-month loans or longer, also a historical high. 

The 73-month-plus segment was up from 27% 10 years ago, the auto inventory and data provider reported.  

As they stretched out the pay-off of their purchases, consumers financed on average the highest amount on record at $44,156, up 4% year-over-year and another record, Edmunds said. And 20% of borrowers agreed to monthly payments of $1,000 or more, tying a record set in last year’s fourth quarter.  

“Until we see a major shake-up in automaker incentives, a meaningful drop in interest rates, or a shift toward a more affordable mix of vehicles — none of which appear to be on the horizon — consumers will have to keep walking this financial tightrope," said Edmunds Head of Insights Jessica Caldwell. 

Buyers also put less money down at an average of $5,815, down 10% year-over-year. At just under 12% of the average purchase price, it was the lowest share since the third quarter of 2020 in the depths of the pandemic. 

Consumers didn’t get a break on financing, either, as interest rates stayed elevated amid overall inflation and zero-percent financing remained scarce at just 1% of second-quarter buyers. 

Buying used didn’t help much, as 6% of buyers in the segment left the lot with $1,000 or higher monthly payments to look forward to, another record share. The segment’s average financed amount was up about 5% year-over-year to $30,414. 

DIG DEEPER: Smaller Loans, Longer Terms