For a growing number of Americans, car payments are starting to look a lot like rent. By the end of 2025, 20.3% of new-car buyers were locked into monthly payments of $1,000 or more, according to new data from Edmunds. That’s the highest share ever recorded … and it’s still climbing. Used-car buyers aren’t far behind, with nearly 6% now paying four figures each month just to keep a vehicle in the driveway.
To be clear, not everyone is paying $1,000 a month. But almost everyone is paying more. The average monthly payment on a financed new vehicle hit $772 (another record), and that number keeps inching upward. Cars aren’t a luxury for most Americans. They’re how people get to work, run errands, and manage daily life — especially in suburbs and small cities where public transit barely exists. The problem is that necessity now comes with a price tag that feels especially overwhelming alongside mortgage payments, daycare expenses, grocery bills, gas, and, well, everything.
How the Heck Did We Get Here?
With new vehicles averaging more than $50,000, buyers are borrowing more money for longer stretches of time. The average new-car loan climbed to $43,759, while loans lasting 84 months or longer made up nearly 21% of new purchases.
Stretching payments is often the only way to make the math work, even if it means carrying debt well into the next decade. And the consequences are already showing up. Auto-loan delinquencies have hit record highs, with more borrowers falling at least 60 days behind. It’s a warning sign that monthly payments are outpacing what many households can realistically absorb.
One CNN-reported case involved a Washington woman who ended up with a $1,100 monthly payment on a used SUV after an accident forced her to replace her car. The payment, paired with rising rent and everyday costs, pushed her into credit-card debt just to cover essentials.
Here’s a Thought: Buy Used!
We know that the CNN case study featured a used vehicle, and that the sky-high interest rate contributed greatly to the four-figure car note, but it was also a pricier model to begin with, guys. Napkin math tells us that — with the monthly payment, interest rate, and loan term — the car probably cost around $52,022. If you won’t say it, we will: There are plenty of viable, cheaper options.
On the r/MiddleClassFinance forum on Reddit, the comments echoed our sentiments regarding the CNN car buyer. One person commented, “Acura RDX… Dodge Ram 2500. These people are buying more than they can afford, then blaming everyone but themselves. You can buy a new Honda Civic for half the cost of a used Acura RDX.”
Another wrote, “I have absolutely zero sympathy for the people featured in that article. A luxury-brand SUV is a totally optional purchase. Getting up to your eyeballs in debt to buy one and then living off of credit cards is a self-inflicted financial wound.”
Is Someone Going to Toss the Life Raft?
There are signs the pressure could ease later this year. New-vehicle prices are beginning to stabilize, and analysts expect modest interest-rate relief as 2026 progresses. But stable doesn’t mean low, and vehicle prices are expected to stay at higher levels.
Until then, $1,000 car payments remain a growing feature of the American financial landscape — one that’s quietly exhausting a lot of people who are just trying to get from point A to point B.
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- 13 Things You Should Never Say at a Car Dealership — We’ve done a deep dive to help you identify the signs to avoid overpaying or getting ripped off.
- 15 Cars of the 1970s That Ruled the Streets — We found 15 of the most iconic, attention-grabbing cars of the ’70s and used J.D. Power and Sports Car Market to document the manufacturer’s suggested retail price for each.
