FI showroom red and grey logo
MenuMENU
SearchSEARCH

Auto Shopping Stretches Budgets to New Highs

Q2 patterns break industry records on multiple fronts, Edmunds reports.

July 1, 2025
Auto Shopping Stretches Budgets to New Highs

The average financed new-vehicle amount in the second quarter was $42,388, a record high and up 2% quarter-over-quarter and 4% year-over-year.

Credit:

Pexels/Karolina Grabowska

2 min to read


Second-quarter data show auto consumers stretched every which way but loose to squeeze a new car into their budgets.

The  quarter, which included the closing gasps of tariff-dodging buys, in fact brought new financing records that would seem to bode ill down the road.

Ad Loading...

New records, according to Edmunds data, included:

  • The share of auto loans exceeding 84 months, or seven years, hitting 22% of new-vehicle financing, up from 20% quarter-over-quarter and from about 18% year-over-year.

  • Monthly payments of more than $1,000 hitting a new high of 19%, up from 18% quarter-over-quarter and year-over-year

  • Average financed new-vehicle amount of $42,388, a record high and up 2% quarter-over-quarter and 4% year-over-year

  • Zero-percent financing deals sinking to an all-time low of less than 1%, down from 3% year-over-year

Meanwhile, second-quarter auto shoppers put forward an average down payment of $6,433, down 1% quarter-over-quarter and 2% year-over-year. The average annual percentage rate meanwhile ticked up a tenth of a percentage point from the first quarter to 7.2%.

"It would be easy to assume that tariffs are already reshaping the market, but the reality is that the record-breaking trends we saw in the second quarter are reflective of more consumers opting for maxed-out term lengths despite vehicle prices remaining steady," said Edmunds Director of Insights Ivan Drury.

"It's clear that buyers are pulling the few levers they can control to manage affordability, whether that's by taking on longer loans, financing more, or putting less money down — even if some of those decisions increase their total costs. Consumers are continuously stretching to afford new vehicles in this market, and while tariffs haven't directly driven these Q2 numbers, they're certainly not going to make things any easier for shoppers moving forward."

Ad Loading...

Though Edmunds didn’t say it, the tariff price avoidance shopping may have moved some consumers to make the wallet-emptying moves, thinking they’d at least avoid any tariff-inflated prices that came later.

But such spending habits don’t come without risk, pointed out Edmunds Consumer Insights Analyst Joseph Yoon.

“While extended loan terms may make a monthly payment more palatable, consumers need to keep in mind the risks associated with a loan extended that far into the future, including increased costs for upkeep down the line and the risk of being underwater on the loan if the car is traded in before it's paid off." 

LEARN MORE: June Auto Sales Forecast Cloudy

More Showroom

Photo of parked cars of various types for sale on a lot
Showroomby Hannah MitchellJuly 20, 2026

Used Sales Hit Summer Drag

The vacation season, combined with high prices, has dented deliveries and added to inventories, though supply is still slim enough to keep listings elevated.

Read More →
desert road with cars driving away, Rebates Incoming with red star graphic, F&I and Showroom logo
Showroomby Lauren LawrenceJuly 15, 2026

California Launches EV Rebate Program

Participating automakers are matching the state's $13.5 million investment in new electric-vehicle rebates scheduled to take effect later this summer.

Read More →
Aerial shot of a car dealership
Showroomby Hannah MitchellJuly 13, 2026

OEM Poll Sees Industry Evolution

Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.

Read More →
Ad Loading...
Photo of cars lined up on lot
ShowroomJuly 10, 2026

The Trade-In Paradox

Retailing older cars with confidence in today’s market is a matter of establishing and following a clear process that can turn greater profit for auto dealers as they aim to meet used-unit hunger.

Read More →
Phot of a dark Kia vehicle interior with steering part of steering wheel and dashboard
Showroomby Hannah MitchellJune 29, 2026

Focus on Vehicle Cabins

The market for interior materials will grow in coming years as automakers look to meet consumer demand while staying competitive with changeups to sourcing and included features.

Read More →
Photo of multiple new SUVs on a car dealership lot
Showroomby Hannah MitchellJune 22, 2026

State Follows Federal Warning on Auto Ads

The Massachusetts attorney general cautioned the state’s automotive dealers to be upfront with the consuming public about their vehicle prices or risk punishment.

Read More →
Ad Loading...
Map of Europe next to back of EV car.
Showroomby Lauren LawrenceJune 22, 2026

European EV Market Hits Record

Seven out of the top 10 electric vehicles sold so far in 2026 in Europe are by European brands, and automakers are seeing the power train fill up their order books.

Read More →
Person pumping gas into car.
Showroomby Lauren LawrenceJune 17, 2026

Used EVs Outpace New

While North American electric-vehicle sales remain down year-over-year, May sales saw a 3% increase from April’s numbers as used EVs led the market.

Read More →
Dodge emblem on orange vehicle
Showroomby Hannah MitchellJune 15, 2026

New Vehicles Down for Most Brands

Healthy May sales cut into inventory as automakers kept a tight reign on supply, though some brands ended the month with excess units on the ground.

Read More →
Ad Loading...
Photo of the back of an electric Mercedes
Showroomby Hannah MitchellJune 10, 2026

Auto Prices Ride May Moderation

Flat ATPs and asking prices clocked in below long-term averages for the month, though some segments saw significant price gains, reported Cox Automotive.

Read More →