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Auto Shopping Stretches Budgets to New Highs

Q2 patterns break industry records on multiple fronts, Edmunds reports.

July 1, 2025
Auto Shopping Stretches Budgets to New Highs

The average financed new-vehicle amount in the second quarter was $42,388, a record high and up 2% quarter-over-quarter and 4% year-over-year.

Credit:

Pexels/Karolina Grabowska

2 min to read


Second-quarter data show auto consumers stretched every which way but loose to squeeze a new car into their budgets.

The  quarter, which included the closing gasps of tariff-dodging buys, in fact brought new financing records that would seem to bode ill down the road.

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New records, according to Edmunds data, included:

  • The share of auto loans exceeding 84 months, or seven years, hitting 22% of new-vehicle financing, up from 20% quarter-over-quarter and from about 18% year-over-year.

  • Monthly payments of more than $1,000 hitting a new high of 19%, up from 18% quarter-over-quarter and year-over-year

  • Average financed new-vehicle amount of $42,388, a record high and up 2% quarter-over-quarter and 4% year-over-year

  • Zero-percent financing deals sinking to an all-time low of less than 1%, down from 3% year-over-year

Meanwhile, second-quarter auto shoppers put forward an average down payment of $6,433, down 1% quarter-over-quarter and 2% year-over-year. The average annual percentage rate meanwhile ticked up a tenth of a percentage point from the first quarter to 7.2%.

"It would be easy to assume that tariffs are already reshaping the market, but the reality is that the record-breaking trends we saw in the second quarter are reflective of more consumers opting for maxed-out term lengths despite vehicle prices remaining steady," said Edmunds Director of Insights Ivan Drury.

"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. Consumers are continuously stretching to afford new vehicles in this market, and while tariffs haven't directly driven these Q2 numbers, they're certainly not going to make things any easier for shoppers moving forward."

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Though Edmunds didn’t say it, the tariff price avoidance shopping may have moved some consumers to make the wallet-emptying moves, thinking they’d at least avoid any tariff-inflated prices that came later.

But such spending habits don’t come without risk, pointed out Edmunds Consumer Insights Analyst Joseph Yoon.

“While extended loan terms may make a monthly payment more palatable, consumers need to keep in mind the risks associated with a loan extended that far into the future, including increased costs for upkeep down the line and the risk of being underwater on the loan if the car is traded in before it's paid off." 

LEARN MORE: June Auto Sales Forecast Cloudy

Originally posted on F&I and Showroom

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