New data from JD Power shows buyers are inundated with hefty car payments driven by expensive new vehicles and negative equity. The average car payment in March was $806, with one in five buyers paying north of $1,000 per month for their new car.
However, the latter figure is driven by buyers of large and premium vehicles: a majority of those with payments of more than $1,000 were owners of premium cars and pickup trucks. The data shows non-truck buyers accounted for 9.3 percent of all loans exceeding $1,000 per month.
Meanwhile, negative equity poses a problem for more than 30% of buyers. In March, 31.2% of used car trade-ins held negative equity, where the buyer had a trade-in with a loan balance greater than what their car is worth. These data points are on the rise, too. In 2025, buyers with negative equity accounted for 26% of loans, and 24% in 2024. Meanwhile, buyers are stretching loan terms to their maximum in order to afford payments. Loans for 84 months or more account for just under 13% of all new car sales in March, with 72-month loans accounting for a staggering 40.5% of sales.
Those with longer 72- or 84-month terms were also likely to return to the market. 20% of new-car buyers went looking for something else in three to four years. For those with 84-month loans, that percentage skyrockets to more than twice that (44.6%)
The data shows costs increasing at both ends of the ownership spectrum. While base prices rise, loan and interest terms are also rising. Simultaneously, consumers have been subject to skyrocketing insurance rates over the last three years, and on top of that, gas prices are at their highest since 2022 as a result of the war in Iran. With prices this high, many are driven into the used market.
However, the latter figure is driven by buyers of large and premium vehicles: a majority of those with payments of more than $1,000 were owners of premium cars and pickup trucks. The data shows non-truck buyers accounted for 9.3 percent of all loans exceeding $1,000 per month.
Meanwhile, negative equity poses a problem for more than 30% of buyers. In March, 31.2% of used car trade-ins held negative equity, where the buyer had a trade-in with a loan balance greater than what their car is worth. These data points are on the rise, too. In 2025, buyers with negative equity accounted for 26% of loans, and 24% in 2024. Meanwhile, buyers are stretching loan terms to their maximum in order to afford payments. Loans for 84 months or more account for just under 13% of all new car sales in March, with 72-month loans accounting for a staggering 40.5% of sales.
Those with longer 72- or 84-month terms were also likely to return to the market. 20% of new-car buyers went looking for something else in three to four years. For those with 84-month loans, that percentage skyrockets to more than twice that (44.6%)
The data shows costs increasing at both ends of the ownership spectrum. While base prices rise, loan and interest terms are also rising. Simultaneously, consumers have been subject to skyrocketing insurance rates over the last three years, and on top of that, gas prices are at their highest since 2022 as a result of the war in Iran. With prices this high, many are driven into the used market.
1k per month... for a car note sounds insane..
