Consumers shopping in the new car market are finding that it’s a challenging time to buy, as high prices and financing conditions have pushed monthly payments to record levels.
Car buyers are financing purchases with larger loans and longer terms on those loans. That can mean being on the hook for auto payments for seven years or more.
As freshly redesigned (and more expensive) 2026 vehicle models make their way to dealership lots, new car prices could climb even higher, experts say.
Here are six stats that show how hard it has become to afford a new car:
Average new car prices are just below $50,000
The average list price for a new car in the first half of the year was $49,215, according to Cars.com. The only time average list prices have gone above the $50,000 level was during a four-month period in 2023. But David Greene, industry analyst at Cars.com, says he wouldn’t rule it out in the months ahead as automakers increase list prices and tariff costs get passed along to consumers.
“It’s absolutely possible that we push through $50,000 for the average vehicle price,” Greene says. “As we roll forward into a new model year, that’s when automakers tend to increase their pricing.”
Only two U.S.-built models under $30,000 remain
Experts say that new cars under $20,000 will soon be extinct from the U.S. market, and options under $30,000 are also becoming harder to find.
Currently, the Honda Civic and the Toyota Corolla are the only U.S.-assembled models left with list prices under $30,000, Greene says. Foreign-made vehicles dominate this dwindling entry-level price segment, which means tariffs could have an outsized impact for shoppers looking at these options.
“Most of the vehicles priced under $30,000 are imported, and those vehicles particularly tend to come from Mexico and South Korea,” Greene says. “Those countries are still being tariffed at the highest rate the auto business is seeing right now, which is 27.5%.”
Experts say that average car prices could rise as tariffs cost automakers billions. Automakers, including Ford, have announced price increases for models assembled in Mexico. Only about 14% of new vehicle inventory is priced under $30,000, Greene notes. In the first half of 2019, a pre-pandemic comparison point, 38% of new car inventory was priced under 30,000.
A record share of $1,000 car payments
Edmunds reports that the share of monthly car payments over $1,000 hit a record high of 19.3% in the second quarter of the year — up from 17.7% a year ago.
The average amount financed for a new car purchase in the quarter, $42,388, was also a record. These bigger car loans are becoming the “new normal,” according to Edmunds.
Buyers commit to longer loans
The lowest auto loan rates are typically offered on loans of 60 months or less. However, it’s not realistic for every budget when the average monthly payment for a new car is $756. Many of today’s car buyers are opting for much longer loans to make monthly payments affordable. In the second quarter, a record share of new car financing (22.4%) was for 84 months or more, according to Edmunds. That figure has spiked from 17.6% in the second quarter of last year.
“It’s clear that buyers are pulling the few levers they can control to manage affordability, whether that’s by taking on longer loans, financing more, or putting less money down — even if some of those decisions increase their total costs,” Ivan Drury, Edmunds’ director of insights, says in a report.
Average auto loan interest rates are still high
The Federal Reserve’s pause on interest rate cuts since December has left car shoppers stuck with high loan rates. In the first quarter, new car loan rates for prime borrowers (661 to 780 credit scores) averaged 6.7%, while “near prime” car buyers (601 to 660 credit scores) were seeing APRs of 9.8%, according to Experian data as of March.
Ultra-low financing offers are scarce. Edmunds reports that 0% finance deals are clocking in at a record low, representing just 0.9% of new-vehicle loans. To secure these loans, buyers usually need strong credit and the ability to handle a shorter term (e.g., 36 or 48 months).
EV sales are surging, but not for long
Electric vehicles are about to get more expensive, experts say. The government’s EV tax credit was defeated by the 2025 GOP tax reform law. This credit has provided tax incentives of up to $7,500 for EV buyers since 2023, after being expanded by the Inflation Reduction Act.
With the tax credit set to expire Sept. 30, EV sales are currently seeing a bump.
“EV sales in July were strong, initially estimated to be the second-best month ever, with sales over 130,000, a 20% year-over-year increase,” Kelley Blue Book said in an Aug. 11 report.
This appears to represent some extra last-minute demand for these models, which automakers have been eager to try to capitalize on with discounts.
When the credit expires, the price gap between EVs and gas cars will likely grow larger, as best-selling models that carry luxury price tags will lose their eligibility for $7,500 tax credits.
More from Money:
New Cars Under $20,000 Are About to ‘Go Extinct’
Want to Avoid Auto Tariffs? Here’s How to Find Out if a Car Is Made in America
According to a recent report from Money.com, consumers in the new car market are facing a challenging time when it comes to purchasing a vehicle. High prices and financing conditions have pushed monthly payments to record levels, making it difficult for buyers to afford a new car.
One of the main factors contributing to this challenge is the trend of financing purchases with larger loans and longer terms. This means that buyers may be on the hook for auto payments for seven years or more, which can be a significant financial burden.
As if that wasn’t enough, the arrival of newly redesigned and more expensive 2026 vehicle models to dealership lots is expected to drive new car prices even higher. Experts predict that the average list price for a new car could surpass $50,000, a level that has only been reached during a four-month period in 2023.
In fact, according to Cars.com, the average list price for a new car in the first half of this year was $49,215, just below the $50,000 mark. However, industry analyst David Greene believes that it is possible for the average vehicle price to exceed $50,000 in the coming months as automakers increase their pricing and pass on tariff costs to consumers.
The rising prices have also led to a decrease in the number of affordable options for car buyers. Currently, there are only two U.S.-built models with list prices under $30,000 – the Honda Civic and the Toyota Corolla. This is a significant decrease from the past, as experts predict that new cars under $20,000 will soon become extinct in the U.S. market.
Furthermore, the majority of vehicles priced under $30,000 are imported, with many coming from countries like Mexico and South Korea, which are still being tariffed at a high rate of 27.5%. This means that tariffs could have a significant impact on the availability and affordability of these options for consumers.
As a result, the average car prices are expected to continue to rise, as automakers face billions of dollars in tariffs. Some, like Ford, have already announced price increases for models assembled in Mexico. In addition, only 14% of new vehicle inventory is currently priced under $30,000, compared to 38% in the first half of 2019.
This increase in prices has also led to a record share of monthly car payments over $1,000, according to Edmunds. In the second quarter of this year, 19.3% of car payments were over $1,000, up from 17.7% a year ago. The average amount financed for a new car purchase, $42,388, was also a record high. This trend of bigger car loans has become the “new normal” for many car buyers, as they opt for longer loan terms to make their monthly payments more manageable.
In conclusion, the new car market is facing a challenging time for consumers, with high prices and financing conditions making it difficult to afford a new vehicle. As prices continue to rise and affordable options become scarce, it is important for buyers to carefully consider their budget and financing options before making a purchase.
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