Experian said rising vehicle loan balances, longer repayment terms and elevated borrowing costs are pushing more new-car buyers into four-digit monthly payments.
By yourNEWS Media Newsroom
Nearly one in five new-car buyers is now taking on a monthly payment of at least $1,000, according to new data from Experian, as larger loan balances and longer repayment schedules continue to reshape the auto finance market.
Experian said Thursday that 18.96% of new-vehicle loans carried monthly payments of $1,000 or more during the first quarter of 2026. The credit bureau’s review covered more than 5 million open auto loans and leases.
Four-digit payments were less common among leases, but still represented a notable share of the market. Experian said 8.71% of new-vehicle leases had monthly payments of $1,000 or more.
Used-car buyers are also seeing higher costs, though $1,000 payments remain far less common in that segment. Experian found that 4.3% of used-vehicle loans now exceed $1,000 per month. At the same time, just under one-third of used-car payments remain below $400.
The findings follow similar data from Edmunds earlier this year. The car-shopping website reported that 20.3% of financed new-vehicle purchases carried payments of $1,000 or more in the fourth quarter of 2025, the highest share it had recorded. That was up from 19.1% in the third quarter and 18.9% one year earlier.
Consumers are increasingly responding to higher prices and interest costs by stretching loans over longer periods. Experian said more than one-third of new-vehicle loans now extend beyond six years. Loans longer than 85 months also increased from 2.95% to 3.33% year over year.
The same pattern is appearing in the used-vehicle market. Experian said 31.54% of used-car loans now run longer than six years, up from 28.6% one year earlier.
“Affordability continues to shape financing decisions across the automotive market,” Melinda Zabritski, Experian’s head of automotive financial insights, said in a press release.
“While shoppers continue to lean toward larger, more expensive vehicles, we’re seeing more consumers take advantage of longer-term loans to offset rising monthly costs.”
Loan amounts have also continued rising. Experian said the average new-vehicle loan reached $43,925 in the first quarter, an increase of $2,150 from the prior year. The average monthly payment on a new vehicle rose to $770, up from $748.
Used-vehicle financing also became more expensive. The average used-vehicle loan climbed to $27,070, up $785 from a year earlier. The average monthly payment on a used vehicle increased to $531 from $523.
Refinancing helped some borrowers lower their bills. Experian said borrowers who refinanced during the first quarter reduced their average interest rate from 10.29% to 8.05%, a drop of about 2.2 percentage points. The change produced an average savings of $81 per month.
Credit unions handled most refinancing activity, accounting for 63.43% of refinanced auto loans. Borrowers who refinanced through credit unions saw the largest savings, lowering monthly payments by an average of $101. Borrowers who refinanced through banks saved an average of $60 per month.
Despite some relief from refinancing, delinquency rates moved higher. Experian said 30-day delinquencies rose to 2% in the first quarter, compared with 1.95% a year earlier. Sixty-day delinquencies increased to 0.86%, up from 0.83%.
Subprime financing also expanded, rising to 15.75% of total vehicle financing in the quarter from 14.40% one year earlier.
“While consumers are benefiting from improved refinancing conditions, we’re also seeing broader financing accessibility emerge,” Zabritski said.
“There continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market.”
Experian’s data also showed a shift in vehicle types being financed. Electric-vehicle financing fell sharply, dropping to 6.23% of new-vehicle financing in the first quarter from 10.93% a year earlier.
Hybrid financing increased over the same period, rising to 14.90% from 12.08%.
The figures point to an auto market in which buyers are continuing to finance expensive vehicles despite higher monthly payments, often by accepting longer loans that reduce near-term costs while extending debt obligations further into the future.
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