Average Monthly Car Payments Falling as Loan Terms Extend to Record Lengths
The average monthly new-car payment dropped from $466 per month for cars sold in October 2002 to $447 per month for cars sold in October 2003, according to Edmunds.com, an online resource for automotive information.
“Ironically, this trend does not reflect lower transaction prices or lower loan amounts, both of which rose during the last year,” said Dr. Jane Liu, executive director of data analysis for Edmunds.com. “Instead, the lower payments came about because the average financing has stretched from 59.6 months last year to over 62 months this year. Over 38 percent of last month’s new car buyers took out loans for terms exceeding 60 months, as compared to only 24 percent of car buyers in October 2002.”
In October 2003, the average car loan amount was $23,801, an increase of 0.9 percent from last October’s $23,656. And the average finance rate rose from 5.46 percent in October 2002 to 5.63 percent in October 2003. So, taking into the increased term lengths, this year’s new car buyers will pay an average of $285 more in interest.
New car prices are rising from month to month as well. From September to October 2003 the Edmunds.com New Vehicle Price Index rose a remarkable 1.68 percent to 99.8 percent (base = 100 set in January 2002), which corresponds to an annual rate of over 22 percent.
This data was released Nov. 25 with the Edmunds Price Index for new vehicles (EPI-N), which reflects price shifts for the industry as a whole, and can be analyzed by different market segmentation. Similar to the Consumer Price Index, the EPI-N measures the average changes in retail prices for a fixed basket of new vehicles with fixed options over time for the purpose of trend analysis. This index takes into account all of the manufacturers’ various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers.
Edmunds.com also analyzes transaction prices and net prices by country of origin, manufacturer, make and model, reflecting manufacturer-to-consumer rebates, including low APR and special lease programs.
About Edmunds.com, Inc.
Edmunds.com (www.edmunds.com) is an online resource for automotive information.
Its comprehensive set of data, tools and services, including Edmunds.com True Market Value® pricing, is generated by Edmunds Data Services and is licensed to third parties. For example, the company supplies over 800,000 pages of content for AOL’s auto channel and NYTimes.com's auto section and delivers monthly data reports to Wall Street analysts.
Edmunds.com was named “best car research” site by Forbes ASAP, has been selected by consumers as the “most useful Web site” according to every J.D. Power and Associates New Autoshopper.com Study(SM), and was ranked first in the Survey of car-shopping Web sites as reported by The Wall Street Journal.
The company is headquartered in Santa Monica, Calif., and maintains a satellite office in Troy, Mich.
More F&I

Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →
F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Read More →
Timing the Market Can Hurt Long-Term Program Performance
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
The 90/10 Rule
In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.
Read More →
Your Office Is Talking
What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.
Read More →
F&I Training Fundamentals
How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.
Read More →
Not Just Any Tire Will Do
More consumers and businesses are opting for all-season options for various reasons as safety, sustainability and convenience push practical change.
Read More →