--- title: Why $1,000 Car Payments Are Becoming the New Normal description: 'Car buyers have it rough: With high sticker prices and auto loan rates, more new car buyers are making monthly payments of $1,000 or higher.' authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Shopping - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Shopping - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-07-05T17:59:02.000Z' modified: '2023-07-05T17:59:02.000Z' section: Shopping tags: - News word_count: 468 canonical: https://money.com/1000-dollar-car-payments-new-normal/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of car made out of cash](https://img.money.com/2023/07/News-Why-1000-car-payments-becoming-common.jpg?crop=0px%2C152px%2C2880px%2C1620px&quality=85) More than 1 in 6 car buyers are now committing to monthly payments of $1,000 or more as [auto loan interest rates](https://money.com/best-auto-loan-rates/) just reached the highest level since 2007. The share of [new car](https://money.com/best-autos/) buyers with four-figure monthly payments was 17.1% in the second quarter of the year, up from just 4.3% during the same period in 2019, according to a [new report](https://www.edmunds.com/industry/press/car-shoppers-feel-the-heat-from-scorching-financing-costs-in-q2-according-to-edmunds.html) from the automotive research firm Edmunds. Car buyers are facing high prices — close to [$50,000, on average](https://money.com/average-new-car-price-record-high/) — and they’re paying more per month in interest. Meanwhile, [luxury cars](https://money.com/best-luxury-cars/) have become more popular relative to cheaper alternatives. But according to Edmunds, there’s another reason why $1,000 monthly payments are becoming more common: Some buyers are taking out loans with shorter-than-normal financing terms to score a better financing deal, which means higher monthly payments. ## An Extended Car Warranty lets you drive with confidence ### Endurance offers extended protection for your vehicle. Click on your state for a free quote today. [See Details](https://money.com/pr/e1c3e005477f?ap_referrer=%2F1000-dollar-car-payments-new-normal%2F) ## What experts say Making high monthly payments can be a savvy way to avoid interest if you can afford it, according to Edmunds. But what's worrisome is that other buyers with $1,000-plus monthly payments are spending more than they can really afford, putting themselves at risk of being underwater on their loans and in a tight spot if they have to sell. - “There are better ways and worse ways to spend $1,000 per month on a car note,” Ivan Drury, director of insights at Edmunds, said in the report. - Among those agreeing to $1,000 monthly payments, nearly two-thirds have longer loan terms between 67 months and 84 months. The share of buyers with short loan terms (31 to 48 months) is much lower (15.6%). - The country's love for cars often leads buyers to make decisions “economists would consider irrational,” Jonathan Smoke, chief economist at Cox Automotive, said on an industry call last week. “They overspend. They break budgets. They forego other expenses in order to get the ride they want.” ## Average monthly car payment hits a record high Part of the issue is that Americans who are accustomed to buying new cars are finding that when they go to shop now, they can’t get anything close to the same deal they got the last time around. - The average price of a new vehicle is now over $48,000 per [Kelley Blue Book data](https://www.coxautoinc.com/market-insights/kbb-atp-may-2023/), an increase of more than $7,000 in the past two years. - With auto loan interest rates at 7.1%, it’s simply a challenging time to buy a car. Even though there are some signs the market could be improving as [vehicle inventory rises and discounts return](https://money.com/new-car-discounts-off-msrp-rising/), the average monthly payment on a new car reached a record high of $733 in the second quarter, according to Edmunds. ## An Extended Car Warranty can protect you against costly repairs ### Endurance offers extended warranties that protect your vehicle for up to 250,000 miles. For a free quote, click below and get started. [See Details](https://money.com/pr/f84a6a706c21?ap_referrer=%2F1000-dollar-car-payments-new-normal%2F) ![](https://s3.consumersadvocate.org/prd/image/image/28507/medium_82a472ac-9432-404d-b735-47a81fc9fc31.webp) Stop paying for costly car repairs and get an Extended Car Warranty! [See Details](https://money.com/pr/ub9375bc33e8?ap_referrer=%2F1000-dollar-car-payments-new-normal%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/1000-dollar-car-payments-new-normal/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Shopping", "item": "https://money.com/shopping/" }, { "@type": "ListItem", "position": 3, "name": "Vehicles", "item": "https://money.com/vehicles/" }, { "@type": "ListItem", "position": 4, "name": "Why $1,000 Car Payments Are Becoming the New Normal" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/1000-dollar-car-payments-new-normal/#webpage", "url": "https://money.com/1000-dollar-car-payments-new-normal/", "name": "Why $1,000 Car Payments Are Becoming the New Normal", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-07-05T17:59:02.000Z", "mainEntity": { "@id": "https://money.com/1000-dollar-car-payments-new-normal/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/1000-dollar-car-payments-new-normal/#breadcrumb" }, "dateModified": "2023-07-05T17:59:02.000Z" }, { "@type": "NewsArticle", "headline": "Why $1,000 Car Payments Are Becoming the New Normal", "articleSection": "Shopping", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/07/News-Why-1000-car-payments-becoming-common.jpg?crop=0px%2C152px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Why-$1000-car-payments-becoming-common" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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