Average New and Used Vehicle Monthly Payments Expected to Shatter Records in Q4, According to Edmunds
Edmunds analysts say a lift in financed luxury vehicle purchases is driving up average monthly payments for new vehicles

SANTA MONICA, CA — January 4, 2022 — Consumers are spending more than ever to finance new and used vehicle purchases as inventory shortages continue and consumer demand runs high. According to the car shopping experts at Edmunds, in Q4 2021 the average monthly payment for new vehicles is expected to climb to $636, the highest level that Edmunds has on record, compared to $614 in Q3 2021 and $581 in Q4 2020. Edmunds data also reveals that the average monthly payment for used vehicles is expected to break a record, climbing to $520, compared to $500 in Q3 2021 and $437 in Q4 2020.

Edmunds analysts say that the increase in average monthly payments is likely due to an influx of luxury shoppers moving away from leasing toward financing new vehicle purchases: Edmunds data reveals that new vehicle lease penetration fell to 23% in December 2021, down from 31% in December 2019. Edmunds data also shows that dealer financing increased across the board for luxury brands year over year. For example, in Q4 2021, dealer-financed purchases made up 46% of Audi sales compared to 34% in Q4 2020, and Lexus dealer-financed purchases made up 45% in Q4 2021 compared to 26% in Q4 2020. For a more comprehensive list of dealer-financed purchase percentages broken out by luxury automaker, please see the table below.

"Leasing and luxury historically have gone hand in hand, but that trend is drifting away as automakers have less reason to incentivize leasing amid inventory shortages," said Jessica Caldwell, Edmunds' executive director of insights. "Affluent luxury shoppers are likely feeling comfortable with financing their pricey purchases instead since interest rates are so low."

Edmunds analysts note that lower annual percentage rate (APR) offers are one bright spot for car shoppers who might feel daunted by fewer discounts and higher prices in the current market.

"If you're looking to finance your next car purchase, know that interest rates are on your side," said Ivan Drury, Edmunds' senior manager of insights. "Make sure to shop around for your auto loan the same way you'd shop around for your vehicle. Automakers and dealers will do what they can to keep customers in their F&I department, which offers a bit more room for negotiation for shoppers in this seller's market. It doesn't hurt to ask if a dealership would be willing to beat the rate you've been approved for elsewhere. Some dealers might also be willing to offer a longer loan term at a comparable or marginally higher interest rate."

Quarterly New-Car Finance Data

Q4 2021 Q4 2020 Q3 2021
Term 69.9 69.9 70
Monthly Payment $636 $581 $614
Amount Financed $39,017 $35,335 $37,479
APR 4.10% 4.60% 4.40%
Down Payment $5,780 $4,720 $5,394

Quarterly Used-Car Finance Data

Q4 2021 Q4 2020 Q3 2021
Term 70 68.1 69.6
Monthly Payment $520 $437 $500
Amount Financed $29,913 $24,384 $28,634
APR 7.40% 7.80% 7.40%
Down Payment $3,484 $3,280 $3,511

Quarterly Percentage of Dealer Financed Purchases by Luxury Automaker

Automaker Q4 2020 Q4 2021
Audi 34% 46%
BMW 33% 42%
Cadillac 36% 44%
Lexus 26% 45%
Mercedes-Benz 29% 44%

About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune, Great Place to Work and Built In, Edmunds is based in Santa Monica, California. Follow us on Twitter, Facebook and Instagram.

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