The average monthly new-car payment hit $806 in March, up $40 from a year ago, and nearly one in five buyers is now shelling out more than $1,000 a month. Those aren’t luxury-only numbers. That’s the broad market, stretched to its financial limit and still reaching for the keys.
JD Power dropped its latest Automotive OEM Intelligence Report this week, and the data reads like a slow-motion affordability crisis that nobody in Detroit, Tokyo, or Seoul seems interested in stopping. New vehicles now sell for an average of nearly $50,000, a 30 percent jump in just six years. The share of new cars listing under $30,000 has cratered from 40 percent five years ago to roughly 13 percent today, according to CarGurus.
The industry’s answer? Stretch the loan.
Eighty-four-month financing — seven full years of payments — now accounts for 12.8 percent of all new-car sales, up from 7.3 percent in March 2019. The 72-month loan, once considered long, represents 40.5 percent of the market. These aren’t fringe products anymore. They are the load-bearing walls of modern car buying.
And they are creating a trap. JD Power found that 31.2 percent of used-vehicle trade-ins now carry negative equity, up from 26 percent last year and 24 percent the year before. Buyers who owe more than their car is worth roll that deficit into the next loan, which inflates the next payment, which demands an even longer term. It is a cycle that feeds itself.
Trucks are ground zero. Despite making up just 18.4 percent of sales, pickups account for 34.1 percent of all 84-month-plus loans. Mainstream non-truck buyers represent only 9.3 percent of those four-figure payments.
Here is the kicker buried in JD Power’s data: buyers who sign 84-month loans don’t actually keep their vehicles for seven years. Twenty percent of all new-car buyers return to the market within three to four years. Among those with 84-month loans, that figure balloons to 44.6 percent — they are financing like they will keep the car forever and trading like they will not, which is the exact behavior that generates negative equity.
The squeeze is pushing people out entirely. The share of new-car buyers earning under $100,000 fell to 37 percent last year, down from 50 percent in 2020, per Cox Automotive. Those priced out of the new market are flooding into used, where relief is thin.
The average used vehicle sells for about $25,000, with monthly payments averaging $560. The share of used cars under $30,000 dropped from 78 percent in 2021 to 69 percent in February.
Automakers built this market deliberately. They killed sedans, loaded SUVs with expensive tech, and concentrated production on high-margin trucks. Ford has promised vehicles under $40,000 “by the end of the decade” — a timeline that tells you everything about how urgently they feel the problem.
Consumer prices rose 3.3 percent in March, the biggest annual increase since May 2024, while new-car prices jumped 12.6 percent year over year. Dana Eble, a 30-year-old account manager in Oregon, is shopping with her husband for a second car on a $20,000 to $30,000 budget. Five years ago, that range covered 40 percent of the new market. Today it covers 13 percent.
“It feels like if anything happens out of our control, it just seems so much more difficult to figure out how to orient our finances,” she said.
The American car market is not broken in some mysterious way. It is working exactly as automakers designed it — for maximum revenue per unit, with affordability outsourced to the finance office. The $806 average payment is not an accident. It is a business model.
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