Average New Car Payment Climbs to $787 as Edmunds Warns of Growing Negative Equity Risks

The average monthly payment for a new vehicle in the U.S. has reached $787, with more than one in five buyers now committing to payments exceeding $1,000 per month, according to data from Edmunds. The figures highlight an intensifying "K-shaped" economic divide across the auto sector: affluent consumers continue purchasing higher-trim, tech-heavy models, while price-sensitive buyers are either priced out or forced into the used vehicle market.
To absorb rising sticker prices—which averaged $50,089 in August according to Kelley Blue Book—consumers are increasingly stretching loan terms out to 84 months (seven years).
Industry analysts caution that extended loan terms heighten consumer credit risk. Because the average trade-in horizon is approximately six years, seven-year loan amortizations frequently leave borrowers with negative equity ("underwater" loans) where vehicle depreciation severely outpaces loan principal paydown.