{"id":12578,"date":"2025-10-01T20:22:48","date_gmt":"2025-10-01T20:22:48","guid":{"rendered":"https:\/\/fundinguno.com\/?p=12578"},"modified":"2025-10-01T20:22:53","modified_gmt":"2025-10-01T20:22:53","slug":"new-car-down-payments-hit-4-year-low-as-buyers-struggle-with-affordability-challenges","status":"publish","type":"post","link":"https:\/\/fundinguno.com\/?p=12578","title":{"rendered":"New car down payments hit 4-year low as buyers struggle with affordability challenges"},"content":{"rendered":"
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Car shoppers<\/u> are facing affordability challenges in the market for new vehicles despite average down payments dipping to nearly the lowest level in four years, according to a new report.<\/p>\n

An analysis by Edmunds found that the average\u00a0down payment for new car purchases<\/u> fell to $6,020 in the third quarter of 2025. That’s the lowest level since the fourth quarter of 2021 and is down from $6,433 in the second quarter of 2025 and $6,619 in the third quarter of 2024 \u2013 but the affordability of new vehicles remains a challenge for consumers.<\/p>\n

The share of car buyers with monthly payments exceeding $1,000 remained persistently high, accounting for 19.1% of all financed new car purchases in the third quarter, near the record of 19.3% in the prior quarter. For used vehicles, monthly payments of more than $1,000 hit a record high of 6.1%, up from 5.6% in the second quarter.<\/p>\n

“In Q3, affordability in the new-car market remained stretched, with buyers putting less money down, financing more and relying on longer terms to keep monthly costs in check,” said Jessica Caldwell, Edmunds’ head of insights.\u00a0<\/p>\n

NEWSOM SAYS GM’S MARY BARRA ‘SOLD US OUT’ ON ELECTRIC VEHICLE POLICIES AND FEDERAL SUBSIDIES<\/u><\/strong><\/p>\n

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“But compared to the near-new market, where inventory has been constrained by lean pandemic-era sales and reduced leasing activity, new vehicles seem to have emerged as the more compelling option,” she continued.\u00a0<\/p>\n

“With the potential for lower APRs and\u00a0tariff-related price increases<\/u> yet to materialize in any meaningful way, shopping for a new vehicle may have felt like the smarter play in Q3 \u2013 and could have given the new car market a modest boost,” Caldwell added.<\/p>\n

CAR INDUSTRY EXPERTS WARN PRICES CLIMBING FAST AS DISCOUNTS BECOME ‘INCREASINGLY HARD TO FIND’<\/u><\/strong><\/p>\n

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More than 1-in-5 car buyers who financed their purchase took out loans stretching seven years or more, with Edmunds analysts reporting that 84-month or longer loans made up 22% of new car loans in the third quarter. That’s down slightly from 22.4% in the last quarter, but is higher than the 18.5% reported in the third quarter of 2024.<\/p>\n

Car purchasers are also taking on\u00a0larger loans<\/u> than they have before, with the average amount financed for new vehicle purchases rising to $42,647 in the third quarter, up from $42,388 in the second quarter of 2025 and $40,713 in the third quarter of 2024.<\/p>\n

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High interest rates have continued to present a\u00a0challenge for buyers<\/u>, with the average annual percentage rate (APR) at 7% in the third quarter \u2013 which marked the third straight quarter in which the average was at or above 7%.<\/p>\n

The Edmunds report noted that promotional financing by sellers was limited in the third quarter, with just 3.4% of loans carrying a 0% rate while 18.3% of loans carried rates under 4%. The share of loans with an APR of 4% or higher was 71.6% \u2013 while a further 13.8% of loans had an APR of 10% or higher.<\/p>\n

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Analysts noted that the\u00a0Federal Reserve cutting interest rates<\/u> by 25 basis points in late September occurred at the end of the quarter and therefore didn’t have a significant impact in the third quarter.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Car shoppers are facing affordability challenges in the market for new vehicles despite average down payments dipping to nearly the lowest level in four years, according to a new report. An analysis by Edmunds found that the average\u00a0down payment for new car purchases fell to $6,020 in the third quarter of 2025. That’s the lowest level since the fourth quarter of 2021 and is down from $6,433 in the second quarter of 2025 and $6,619 in the third quarter of 2024 \u2013 but the affordability of new vehicles remains a challenge for consumers. The share of car buyers with monthly<\/p>\n","protected":false},"author":1,"featured_media":12579,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-12578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nNew car down payments hit 4-year low as buyers struggle with affordability challenges | FundingUno<\/title>\n<meta name=\"description\" content=\"Car shoppers are facing affordability challenges in the market for new vehicles despite average down payments dipping to nearly the lowest level in four\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fundinguno.com\/?p=12578\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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