Edmunds, an automotive data and analytics company, has a new report that says the average monthly payment for a new car is now over $700, which is completely ridiculous. This is partly because car loan interest rates are It’s also the highest they’ve reached in years. More than 14% of buyers even have monthly payments over $1,000, according to Edmunds, Edmunds is the highest number on record and is truly disturbing.
Now, it’s true that because of long-term inflation, everything costs more, and more, for us Millennials, somehow, can still expect auto payments. per person up to $200 to $300 a month. But that simply doesn’t materialize in 2022, with more expensive cars but also carmakers not selling as many small, affordable cars, opting instead for SUVs and trucks from $40,000 to $50,000. In that sense, large auto payments are not surprising, however, more than $1,000? Sheesh.
In a releaseEdmunds also notes that, yes, the biggest spenders tend to be luxury customers, although there are also a few truck brands in that crowd:
- More than 1 in 4 consumers who have funded an EV have committed to a monthly payment of more than $1,000. 26% of EV-funding consumers commit to $1,000+ monthly payments, compared with 24% of consumers funding plug-in hybrids, 14% financing petrol-only vehicles, and 4 % financing hybrid vehicles .
- Two major brands known for their popular trucking services made the list of the top 10 brands with the largest market share of $1,000 + monthly payments. Although luxury brands dominate the list, GMC still takes 7th place with 41% of its shopper base committing to $1,000 or more monthly payments and Ram takes 10th place with 36% base. Buyer base commits monthly payments of $1,000 or more. . You can find the full list of shares ranked at $1,000 + monthly payments below.
- Large trucks and large SUVs dominate the top 10 list with the largest share with $1,000+ monthly payments. The Ford F-150, Ram 1500, and Chevrolet Tahoe accounted for the highest percentage of monthly payments over $1,000. The Ford F-150 accounted for 5.6% of all new car loans made in Q3 with monthly payments + $1,000. You can find a list of the top 10 models ranked at $1,000 + monthly payments below.
- Countries where consumers favor buying big trucks are leading the country in terms of the largest share of $1,000+ monthly auto payments (infographic available). Wyoming, Texas, and Utah had the largest percentage of new car buyers who agreed to a monthly payment of more than $1,000 (25.7%, 20.8%, and 19.1%, respectively).
Separately, Edmunds gives the following table, which I confess I do not fully understand, although it seems to say that 58 percent of the Ram 2500 is financed by loans with payments over $1,000.
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Now, personal finance people — some of them even call themselves experts — generally recommend that your car not take up more than 15 percent of your take-home pay, meaning $600 a month if you make $4,000 a month, or lesser or higher amounts depending on your income as the case may be. And while I can imagine that a lot of BMW X5 buyers make the kind of money that might justify a payment over $1,000 a month, I can also imagine that a lot of F-150 buyers don’t.
And while Edmunds doesn’t go into it, I also wonder how many of the people who don’t have payments over $1,000 a month have cheaper payments because they’ve opted to take out long term loanconsists of some is 96 months, is eight years, which is bullshit. A car loan is also a loan to buy an asset that is depreciating in value and, all of this makes me extremely stressed.
