More new car buyers relied on 84 months loan terms

According to a recently released report, more car buyers used seven-year loans in the first quarter to fund new vehicles in the first quarter.

Edmunds said last week that he discovered 84 months of loans in the first three months of 2025 accounted for 19.8% of new car financing.

The report shows that the seven-year loan percentage for new vehicles in the first quarter increased by 4 percentage points year-on-year. Funding for such new vehicles has skyrocketed by 6.4 percentage points compared to the first three months of 2019.

Edmunds also said that the 19.8% figure in the first quarter marked “a record high” in 84-month loans on new vehicles.

Car payments have risen to the highest level for over 30 years

“The automotive financial markets showed signs of stability in the first quarter, but that stability does not mean an increase in affordability,” Edmunds’ Jessica Caldwell said in a press release. “It’s clear how many consumers are still growing financially when one in five new car buyers receive a seven-year loan. Even if they are held relatively flat, the extended terms and ongoing reliance on high payments make it clear that car buying is a challenge.”

In the first quarter, 10.2% of those who funded new vehicles agreed to a loan of up to four years.

The report also said that a year-on-year decline in new car financing loans on 60-75 months terms in the first quarter showed “a wider change as consumers continue to stretch or shorten their financial targets.” Their share went from 69.7% in the first quarter of 2024 to 67.4%.

According to Edmunds, the average loan term for new vehicles was 69.5 months in the first quarter, with new car buyers hooked for monthly payments, typically $741. It was also found that the average annual rate of vehicle vehicles is 7.1%.

For roughly 17.7% of new car buyers in the first quarter, they faced monthly payments of over $1,000, Edmunds reported.

Caldwell said the Trump administration’s car rates “have a “risk” of “adding fuel to the fire” due to the issue of affordable prices for car buyers.

President Donald Trump announced tariffs on imported cars, mild trucks and certain major auto parts later last month, reaching 25%. The collection vehicle and truck took effect on April 3rd, the same day Edmunds released the report.

Stellantis offers employee discounts to US buyers when automatic rates are enabled

Some economists and financial analysts say that tariffs on Trump’s vehicles and auto parts could increase the price of vehicles by thousands of dollars.

While announcing car rates in late March, Trump wants to allow people to deduct taxes on car loan payments for American-made vehicles. He also mentioned such proposals during his joint speech to Congress earlier that month.

President Donald Trump (Kevin Dietsch/Getty Images)

That, according to Caldwell, “it can provide real relief to consumers, especially when it is paid in full on new vehicle loans, equivalent to what can be used for home renovation projects and holidays.”

“But there are still many unanswered questions, including how “made in America” ​​is implemented and who will qualify,” she said in a press release. “Until these details are clear, it’s difficult to measure how much of a policy like this will have on the market.”

According to Edmunds, Americans with new funded vehicles accounted for an average of more than $9,231 interest in the first quarter.

Trump’s 25% car import duties: These are the most affected manufacturers

The Car Shopping Guide was scheduled for the US to see more than 3.8 million new vehicle sales in the first quarter in late March.

Cox Automotive reported Monday that its initial estimate for the average trading price for the new vehicle was $47,448 in March.