The average new car payment in the United States has climbed to a record $787 a month, and total auto loan debt has topped $1.7 trillion for the first time. The figures, from Edmunds data for the third quarter of 2026, show how the record prices on dealer lots are turning into record monthly bills for ordinary buyers.
The average amount financed on a new car reached a record $44,664 in the third quarter of 2026, according to Edmunds, with buyers stretching loans to an average of 70.5 months at about 7.0 per cent APR. More than one in four financed new-vehicle purchases now involves a loan lasting at least 84 months, or seven years. The average used-car payment is $582 a month, and 6.5 per cent of used-vehicle buyers have taken on monthly payments of $1,000 or more, also an all-time high.
Seven-year loans are now normal
The long loan is the only way many buyers can make the maths work. Average new-vehicle prices hit a record $51,109 in October, according to Kelley Blue Book, and buyers are bridging the gap with time rather than money. A $44,664 loan at 7 per cent over 70 months costs roughly $13,000 in interest alone, and an 84-month loan costs thousands more while the car loses value far faster than the balance falls.
Used cars tell an even harsher story, according to the Edmunds figures. The average used car financed is $30,703, also over 70 months, but with an average down payment of just $3,865 and an annual percentage rate of 10.6 per cent, against 7 per cent for new cars. At $582 a month across 70 months, a used-car buyer repays about $40,970 on $30,703 borrowed.
Households are running out of room
The strain shows up across household budgets. Total US auto loan debt now stands at $1.71 trillion, up from $1.16 trillion at the end of 2016, while the personal saving rate fell to 2.6 per cent in April 2026, its lowest since 2022, before recovering to about 4.1 per cent in August. Credit card debt has grown from $779 billion in 2016 to $1.26 trillion.
Buyers are adapting by shopping down: nearly three-quarters of recent buyers switched brands to find the right price, according to a separate Santander survey, and more than 80 per cent of prospective buyers are considering a used vehicle. The advice from the numbers is blunt. A shorter loan on a cheaper car beats a seven-year loan on a dearer one, and a buyer who cannot afford the payment on a 60-month term probably cannot afford the car. Mortgage rates have eased for a fourth straight week, but car buyers have seen no such relief, and retail sales growth is slowing as households feel the squeeze.
