by Record Car Expenses: What the New Data Shows
New data on auto financing indicates that many Americans are facing significant financial strain. Every fifth buyer agrees to monthly payments of $1000 or more, and an even greater number of people are choosing long-term seven-year loans.
The average amount financed for a new car in the second quarter of 2025 was $42,388, which is higher than in previous periods. At the same time, buyers are making a smaller down payment – an average of $6,433. This forces them to choose longer loan terms to reduce the monthly burden.
Financing for New and Used Cars
Experts note that buyers who cannot afford a new car sometimes choose leasing or used cars. However, the latter option has its drawbacks – high interest rates on loans.
For example, the average monthly payment for a used car in the second quarter of 2025 was $559, which is significantly lower than for a new one ($756). But the interest rate on such loans reaches 10.9%, making them less advantageous in the long term.
Interestingly, the number of zero-percent APR offers has shrunk to a minimum since 2004 – only 0.9% of deals in the second quarter of 2025. This is another indicator of how financing conditions in the auto market are changing. The trend of rising prices and increasing loan terms may continue, forcing buyers to seek alternative options.
