Americans Burdened by New Car Debt, with Loans Averaging 70 Months

Edmunds has reported that the average monthly lease payment for new vehicles hit an all-time high in Q2.

A new study has found that many new vehicle buyers in the U.S. are being pushed to their financial limits, opting for longer loan terms and higher interest rates.

In the second quarter of 2024, the average APR for new vehicles increased from 7.1% to 7.3%, continuing a trend of APRs exceeding 7% for the sixth consecutive quarter. Additionally, to manage rising prices, many consumers are opting for longer loan terms, with the average new-vehicle loan term reaching 69 months in Q2.

This is the highest level since the end of 2022, when average new-vehicle interest rates were below 7%.

If there’s a small silver lining for buyers, it’s that CDK Global, the car dealership software company affected by a cyberattack last month, is making progress in bringing impacted dealers back online. According to Edmunds, this downtime might prompt some dealers to offer competitive new incentives to make up for lost time.

“High interest rates continued to be a significant obstacle to new-vehicle sales growth in the second quarter,” said Jessica Caldwell, Edmunds’ head of insights. “In theory, improved inventory and increased incentives should create a more consumer-friendly market. However, most Americans cannot purchase cars with cash, and rising borrowing costs remain a major hurdle for new vehicle purchases.”

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  • Growing up with a father who was a mechanic I had an appreciation for cars and motorcycles from an early age. I shared my first bike with my brother that had little more than a 40cc engine but it opened up a world of excitement for me, I was hooked. As I grew older I progressed onto bigger bikes and...

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