Nearly 1 in 5 New-Car Buyers Now Face $1,000 Monthly Payments: Experian

Monthly payments on new cars are still rising, and a growing share of buyers are now starting their bills with four digits.

Nearly 19 percent of new-vehicle loans carried monthly payments of $1,000 or more in the first quarter of 2026, Experian said on Thursday in a review of more than 5 million open auto loans and leases.

Payments above $1,000 accounted for 18.96 percent of new-vehicle loans and 8.71 percent of new-vehicle leases, the credit bureau said.

On the used-vehicle side, the sticker shock is less widespread but still notable. Experian found that 4.3 percent of used-vehicle loans now have monthly payments above $1,000, while just under a third of used-car payments remain below $400.

Experian’s findings echo a pattern flagged earlier this year by car-shopping website Edmunds. In that report, Edmunds found that the share of financed new-vehicle purchases with payments of $1,000 or more climbed to a record 20.3 percent in the fourth quarter of 2025, up from 19.1 percent in the third quarter and 18.9 percent a year earlier.

Buyers Stretch Loan Terms

As prices and borrowing costs keep monthly bills elevated, consumers are increasingly stretching out repayment terms to make the math work.

More than a third of all new-vehicle loans now run longer than six years, Experian said. The share of loans extending beyond 85 months also rose year over year, from 2.95 percent to 3.33 percent.

Used-car buyers are following a similar pattern, with 31.54 percent of used loans now exceeding six years, up from 28.6 percent a year earlier.

“Affordability continues to shape financing decisions across the automotive market,” Melinda Zabritski, Experian’s head of automotive financial insights, said in a press release.

“While shoppers continue to lean toward larger, more expensive vehicles, we’re seeing more consumers take advantage of longer-term loans to offset rising monthly costs.”

The underlying loan balances are also climbing. The average new-vehicle loan reached $43,925 in the first quarter, up $2,150 from a year earlier, Experian said. Average monthly payments rose to $770 from $748 over the same period.

Meanwhile, used-vehicle loans averaged $27,070, up $785 year over year, while the average used-vehicle monthly payment ticked up to $531 from $523.

Refinancing Offers Some Relief

Borrowers who refinanced in the first quarter lowered their average interest rate by about 2.2 percentage points, Experian said, falling from 10.29 percent to 8.05 percent. That translated into an average monthly savings of $81.

Credit unions accounted for 63.43 percent of refinancing activity and delivered the biggest monthly reduction: Borrowers who refinanced through credit unions saved $101 a month on average, compared with $60 for those who refinanced with banks.

Even as refinancing improves terms for some borrowers, delinquency rates have continued to edge higher, particularly among subprime customers.

Thirty-day delinquencies rose to 2 percent in the first quarter, up from 1.95 percent a year earlier, while 60-day delinquencies increased to 0.86 percent from 0.83 percent, Experian said.

Subprime financing represented 15.75 percent of total vehicle financing in the quarter, up from 14.40 percent a year earlier.

“While consumers are benefiting from improved refinancing conditions, we’re also seeing broader financing accessibility emerge,” Zabritski said.

“There continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market.”

Experian’s data also pointed to a shift in what buyers are financing. Electric-vehicle financing fell sharply in the first quarter, dropping to 6.23 percent of new-vehicle financing from 10.93 percent a year earlier.

Hybrid financing moved in the opposite direction, rising to 14.90 percent from 12.08 percent over the same period.