Average New-Car Down Payment Hits Near-Record High, According to New Edmunds Analysis
SANTA MONICA, CA — June 2, 2017 — As interest rates climb and consumers stretch to afford increasingly expensive cars, buyers are showing signs of practicality by digging deep to put more money down up front, according to a new analysis from Edmunds, the leading car shopping and information platform. The amount of money car buyers put down to buy a new vehicle was up 6.5 percent, or $233, in May as compared to a year earlier to an average of $3,801 (and up $504 from five years ago). Down payments were up slightly on the used-vehicle side as well; used-vehicle buyers put down an additional $93 on average in May compared to last year, an increase of 3.8 percent.
"Buyers want pricier cars with more bells and whistles, leading to the troubling trend of trading longer loan terms for lower monthly payments," said Edmunds Executive Director of Industry Analysis Jessica Caldwell. "But now that interest rates are also on the rise, something has to give. In our increasingly credit-based culture where consumers are willing to finance everything from cellphones to vacations, more money up front shows car buyers aren't completely sacrificing practicality in order to get the cars they really want."
The Edmunds analysis found that while the average loan term, monthly payment and amount financed on new vehicles have grown steadily over the past five years, each was only up about 1 percent in May compared to last year. On the used side, all three metrics show slight dips in May.
More insight into recent auto industry trends can be found in the Edmunds Industry Center at http://www.edmunds.com/industry-center/.
| May 2017 | Change from May 2016 |
5-Year Change | |
|---|---|---|---|
| Loan Term | 69.1 months | 1.1% | 6.6% |
| Monthly Payment | $510 | 1.2% | 10.6% |
| Amount Financed | $30,314 | 1.0% | 15.9% |
| APR | 5.0% | 12.7% | 14.9% |
| Down Payment | $3,801 | 6.5% | 15.3% |
| May 2017 | Change from May 2016 |
5-Year Change | |
|---|---|---|---|
| Loan Term | 67 months | -0.2% | 6.2% |
| Monthly Payment | $385 | -0.2% | 4.1% |
| Amount Financed | $21,310 | -0.9% | 11.3% |
| APR | 7.63% | 4.5% | -7.8% |
| Down Payment | $2,529 | 3.8% | 12.3% |
About Edmunds
Edmunds is the leading car information and shopping platform, helping millions of visitors each month find their perfect car. With products such as Edmunds Your Price, Your Lease, and Used+, shoppers can buy smarter with instant, up-front prices for cars and trucks currently for sale at more than 13,000 dealer franchises across the U.S. Edmunds' in-house team of unbiased car-shopping experts provides industry-leading vehicle reviews and shopping tips, as well as welcomes all car-shopping questions at our Help Center, via email at help@edmunds.com, and on Twitter and Facebook. The company is regarded as one of America's best workplaces by Fortune and Great Places to Work. Edmunds is based in Santa Monica, California, and has a satellite office in downtown Detroit, Michigan.
