New Car Buyers Set Record 84-Month Loan Terms

New-vehicle buyers in the United States are increasingly extending loan terms to manage rising costs, with a record 25.5% of financed purchases in the third quarter of 2026 featuring terms of 84 months or longer. According to data from Edmunds, the average monthly payment reached a record $787, while the average amount financed rose to an all-time high of $44,664.

These trends are driven by inflationary pressures and higher vehicle prices, with the average transaction price topping $50,000 in August. Approximately 21.2% of buyers now face monthly payments of $1,000 or more. To maintain steady demand, buyers are reducing down payments, which averaged $5,554, and allocating more of their household budgets to transportation.

However, these extended terms have resulted in a record average of $9,938 in interest paid over the life of the loan, even as the average APR remained steady at 7%. Analysts warn that these longer loans heighten the risk of negative equity. Economic pressures are further compounded by rising gasoline prices and reports from the U.S. Bureau of Economic Analysis that consumer spending outpaced income in August. The National Automobile Dealers Association expects borrowing costs to rise further in the fourth quarter due to elevated bond yields.