Average New-Car Down Payments Near a Record High, Edmunds Finds | Edmunds

Average New-Car Down Payments Near a Record High, Edmunds Finds

The average new-car down payment has reached $3,801, a near record, according to a new analysis from Edmunds.

With interest rates on the rise, new-car buyers are stretching their budgets to make bigger down payments so they can purchase more expensive vehicles, according to Edmunds. The average down payment was up 6.5 percent in May, an increase of $233 from this time last year and $504 more than five years ago.

Consumers are putting more money down on used-car purchases as well. Edmunds analysts found that the average down payment on a used vehicle in May was $2,529, up 3.8 percent and $93 more than May of last year.

"Buyers want pricier cars with more bells and whistles, leading to the troubling trend of trading longer loan terms for lower monthly payments," said Jessica Caldwell, Edmunds executive director of industry analysis. "But now that interest rates are also on the rise, something has to give.

"In our increasingly credit-based culture, where consumers are willing to finance everything from cellphones to vacations, more money up front shows car buyers aren't completely sacrificing practicality in order to get the cars they really want," Caldwell said.

Edmunds analysts determined that the average new-car loan term, monthly payment and total amount financed have all grown over the past five years. Loan terms now average 69.1 months, an increase of 6.6 percent compared to five years ago. Monthly payments average $510, up 10.6 percent. Finance amounts now average $30,314, which is an increase of 15.9 percent. Used-car financing metrics showed a similar trend. Nevertheless, each figure was only up about 1 percent in the month of May compared to this time last year.

More insight into recent auto industry trends can be found at the Edmunds Industry Center.

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