SANTA MONICA, CA — October 5, 2022 — A growing share of Americans are committing to monthly new car payments topping $1,000 as interest rates and prices continue to rise, according to the car shopping experts at Edmunds. As reported in Edmunds' Q3 finance trends release, 14.3% of consumers who financed a new vehicle purchase in Q3 2022 committed to a monthly payment of $1,000 or more — the highest level that Edmunds has on record — compared to 12.2% in Q2 2022 and 8.3% in Q3 2021.
"Despite worrisome macroeconomic conditions, Americans are spending more money than ever on new vehicle purchases," said Jessica Caldwell, Edmunds' executive director of insights. "Ongoing inventory shortages are partly to blame, but this trend is also a reflection of consumer preferences. In the past decade, we've seen Americans embrace a bigger-is-better mindset by gravitating toward larger vehicles with more creature comforts, technology-heavy features and, more recently, electrified powertrains — but that all comes with added cost. Rising interest rates combined with higher prices has sent monthly payments soaring to new heights."
Edmunds analysts took a closer look at the share of monthly payments over $1,000 for financed new vehicle purchases in Q3 by state, make, model and powertrain. Their findings reveal that:
- More than 1 in 4 consumers who financed an EV committed to a monthly payment over $1,000. 26% of consumers who financed an EV committed to a $1,000+ monthly payment, compared to 24% of consumers who financed a plug-in hybrid, 14% who financed a gas-engine-only vehicle, and 4% who financed a hybrid vehicle.
- Two mainstream brands known for their popular truck offerings made it to the top 10 list of makes that commanded the greatest share of $1,000+ monthly payments. Though luxury brands dominate the list, GMC earned a No. 7 spot with 41% of its shopper base committing to a $1,000+ monthly payment and Ram took the No. 10 spot with 36% of its shopper base committing to a $1,000+ monthly payment. The full list of makes ranked by share of $1,000+ monthly payments can be found below.
- Large trucks and large SUVs dominated the top 10 list of models that commanded the greatest share of $1,000+ monthly payments. Ford F-150, Ram 1500 and Chevrolet Tahoe captured the highest percentage of monthly payments over $1,000. The Ford F-150 made up 5.6% of all new vehicle loans made in Q3 with a $1,000+ monthly payment. The top 10 list of models ranked by share of $1,000+ monthly payments can be found below.
- States with consumers that favor large truck purchases are leading the country in the greatest share of $1,000+ monthly car payments (infographic available). Wyoming, Texas and Utah had the greatest percentage of new-car shoppers who agreed to a monthly payment over $1,000 (25.7%, 20.8% and 19.1%, respectively). The full list of states ranked by share of $1,000+ monthly payments can be found in an infographic on Edmunds.
"A pullback of lease incentives is yet another contributing factor to these rising payments," said Ivan Drury, Edmunds' director of insights. "As leasing grows increasingly more expensive, more affluent consumers are instead opting to finance luxury brands and large vehicles. And with few lease or finance incentives expected from automakers in the coming months, and yet another rate hike by the Fed anticipated in November, we expect that monthly payments topping $1,000 will become even more common."
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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 and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.