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New and Used Vehicle Monthly Payments Expected to Climb to Record Highs: Edmunds


Car shoppers are digging deeper into their pockets to finance new and used vehicle purchases as inventory shortages continue to squeeze the automotive industry. According to the car shopping experts at Edmunds, the average monthly payment for new vehicles purchased in Q1 2022 is expected to climb to $648, the highest level that Edmunds has on record, compared to $639 in Q4 2021 and $575 in Q1 2021. The average monthly payment for used vehicles is also expected to break a record, climbing to $538, compared to $524 in Q4 2021 and $432 in Q1 2021.

Edmunds data reveals that the average amount financed for new and used vehicles will also hit record levels in the first quarter of 2022, climbing to $39,340 and $30,830 compared to $35,040 and $23,958 in Q4 2021, respectively. Edmunds analysts say that the increase in average monthly payments and amount financed is in part due to luxury shoppers moving away from leasing toward financing their new vehicles: Edmunds data reveals that luxury new vehicle lease penetration fell to 32% in March 2022, down from 53% in March 2019.

Shrunken inventory continues to wreak havoc on both the new and used vehicle markets, and shoppers who can actually get their hands on a vehicle are committing to never-before-seen average payments and loan terms,” said Jessica Caldwell, Edmunds’ executive director of insights.

Edmunds data reveals that the average down payment on new vehicles climbed to $6,026 in Q1 2022, a 27% increase compared to Q1 of 2021 and the first time this figure has surpassed $6,000. The average down payment on used vehicles saw a less notable increase, climbing to $3,574 in Q1 2022, or a 7% increase compared to Q1 2021. But Edmunds analysts note that used loan durations set a new record this quarter, climbing to 70.4 months compared to 68.2 in Q1 2021.

Edmunds analysts also note that longer loan terms might seem appealing to car shoppers because they offer lower monthly payments, but caution that they can also present risks to consumers down the road.

“Many car shoppers are likely seeing red when faced with the prospect of paying sticker or above sticker price for new vehicles, and are defaulting to the used market to seek relief. But this is not a normal market, and financing a used vehicle could potentially end up costing you more in the long run,” said Ivan Drury, Edmunds’ senior manager of insights. “If you’re financing a three-year-old vehicle with a 70-month loan, you’ll have a nine-year-old vehicle by the time you complete your payments. That’s risky business when you consider wear-and-tear, and you could be at greater risk of needing to roll negative equity into your next car loan.”

Edmunds experts advise that consumers in need of a vehicle, and thinking that a used vehicle will save them money, should instead consider buying a new or certified pre-owned vehicle, since those offer more favorable interest rates and warranties.

Quarterly New-Car Finance Data

Q1 2022Q1 2021Q4 2021
Monthly Payment$648$575$639
Amount Financed$39,340$35,040$39,216
Down Payment$6,026$4,729$5,808

Quarterly Used-Car Finance Data

Q1 2022Q1 2021Q4 2021
Monthly Payment$538$432$524
Amount Financed$30,830$23,958$30,095
Down Payment$3,574$3,345$3,503
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