36.5% Of Buyers Financed For More Than 73 Months In Q2

More new vehicle shoppers are taking out larger and longer term loans to combat affordability challenges in the car market, according to new data shared by Edmunds. Nearly 1 in 4 new-vehicle buyers took on 84 month car loans or longer in the second quarter of 2026, setting a new record, according to its latest analysis.  Edmunds says its data also shows that car buyers are tightening down payments and while financing record amounts, they're still paying record average monthly payments.

Those are some of the troubling trends in the automotive finance market in Q2 2026. Here's a closer look at Edmunds Q2 2026 data on financed new-vehicle purchases, as shared in a press release:

• Buyers are lengthening their loans past 72 and 84 months at record levels. Edmunds says a record 36.5% of all financed new-vehicle purchasers in Q2 took on a loan of 73 months or longer, up from 27.3% a decade prior. 23.9% of Q2 financers signed on for loans of 84 months or longer, another record.
• Monthly payments reached an all-time high for the third consecutive quarter.  Edmunds also reports that the average monthly payment on new-vehicle purchases hit a new record of $777, which is slightly above last quarter's record of $773. Average monthly payments crossed the $700 mark for the first time in Q3 2022 and have generally remained flat or ticked upward since.
• Consumers have never financed as much on a vehicle purchase as they did in Q2. The new Edmunds analysis found that the average amount financed for a new-vehicle purchase climbed to a new all-time high of $44,156, up $257 from Q1 and $1,768 from Q2 of last year ($42,388).
• Meanwhile, shoppers are putting less money down. The average down payment on a new-vehicle purchase continues to sink, dipping to $5,815 in Q2 from $6,206 a quarter ago and $6,433 a year ago, even as new-vehicle prices have risen in that span. Down payments represented just 11.6% of the average total purchase in Q2, the lowest share since Q3 2020.
• The share of monthly payments averaging $1,000 or more matched an all-time high at 20.3%. One in five (20.3%) new-vehicle financers in Q2 took on monthly payments of $1,000 or more, which Edmunds says ties the record mark from Q4 2025 and up slightly from last quarter's figure of 20.0%.
• Total interest paid reached a new record as interest rates remain elevated. The average total amount of interest paid over the life of a new-vehicle loan climbed to a record $9,811, up from $9,592 last quarter and $9,616 a year prior. The jump comes amid continued heightened APRs, which ticked back up to 7.0% in Q2.
• Zero percent financing has all but vanished. Just 1.2% of new-vehicle buyers secured a 0% APR loan in Q2, down from 2.6% in Q1. The share peaked at 24.2% in Q2 2020 amid pandemic-era incentives and has not reached 4% share since Q4 2021.
• Used-vehicle buyers are feeling the squeeze too. The share of used-car purchases with monthly payments of $1,000 or more rose to a record 6.3% in Q2, while the average amount financed for a used vehicle climbed to $30,414, up from $29,080 in Q2 2025.

"The Q2 data perfectly illustrates the stark reality of today's new-vehicle market: Affordability is such a massive hurdle that buyers are forced to stretch their budgets to the absolute limit just to get into a new vehicle," said Jessica Caldwell, Edmunds' head of insights. "When you see loan terms extending to record lengths, down payments shrinking, and monthly payments hitting all-time highs, you're looking at a clear recipe for long-term financial strain."

"Unfortunately, this is the new normal for new-car buyers. 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."

Edmunds analysts stress that the continued lengthening of the term of car loans presents challenges and risks, including financial disadvantages over the long haul of a loan.

"Car shoppers are caught in a dangerous practice of focusing heavily on their monthly payment while ignoring the potential long-term damage to their wallets," said Ivan Drury, Edmunds' director of insights. "Pushing loan terms past six or seven years might make an average monthly payment more digestible today, but it's a mathematical trap. When you pair a 7.0% APR with an 84-month loan and a smaller down payment, you're signing up to hand over nearly $10,000 on average in interest alone. Unfortunately, stretching out the term to be able to swallow a higher-priced vehicle guarantees you'll be building equity at a snail's pace, leaving you highly vulnerable to falling underwater when it's time to trade in."