New data shows the commodity of affording a new car.

Edmunds, an auto research company, published data for the first quarter of 2026, showing that new car financing hit all time highs in terms of monthly payments and total MSRP pricing. 

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Some of the findings:

  • Average monthly payments for financed new-vehicle purchases rose to $773
    • Financed new vehicles climbed to a record high $43,899, up from $41,473 for the same reporting period in 2025
      • The share of new car-buyers committing monthly payments more than $1,000 rose to 20%

        Staggering statistics for car dependent areas like Raleigh, where more than 60% of city residents report commuting to work alone by car. 

        Findings from credit reporting company Experian support these findings.

        Average car monthly payments, according to Experian, rose to $537 a month. It adds that tariffs have impacted costs, with import taxes on cars and parts increasing production costs, "often by thousands per vehicle."

        Rising car costs have elicited the question: is this commodity growing out of reach for average Americans?

        The recommendation from Kelley Blue Book is that people should keep monthly car payments below 10% of their monthly take home, which means one would have to make more than $90,000 per year to afford the average cost of the newly financed monthly payment. 

        How did we get here? 

        During the COVID pandemic, automakers shifted focus to still make profit: high end, luxury vehicles. 

        “Automakers really focused on those high end vehicles. Because automakers make more money on luxury cars, loaded pickup trucks," Keith Barry says, Autos Reporter for Consumer Reports. 

        By and large, people are still buying entry level vehicles according to Barry, but an influx of higher end, larger, luxury vehicles are dragging the average cost of newly financed vehicles up behind it. 

        “The growth has been at the high end of the market. That doesn’t mean everyone is going out buying more expensive cars. The most popular new vehicles are the entry level, there are so many more expensive, fully loaded, larger big luxury vehicles it’s distorting that number a bit," he says.

        Now, less used cars in circulation because of it, driving up the price of used cars, too. 

        "If you think back to those car shortages when they were making fewer and fewer cars in 2024… the most desirable used cars are 3-6 years old. You can’t go back in time and make more used cars… so the prices of used cars have gone up because of a lower supply. Perfect storm hitting the entire marketplace.”

        How to navigate the high-priced marketplace for cars

        Prearrange financing. Figure out your budget and shop for a car loan based on what you can afford to pay monthly and as a down payment. It’s always a good idea to get financing set up through your bank or credit union before going to a dealership to look at cars. That gives you a baseline against which you can compare the terms of dealer financing, which may or may not be a good deal. Sometimes, dealer financing benefits from manufacturer subsidies that feature a lower interest rate than you can get from your bank. Having financing ready to go will also give you a leg up if you’re looking at a sought-after model that isn’t likely to remain on the dealership lot for long.

        Make the biggest down payment possible. This is especially important as interest rates trend higher. Maximizing the amount you pay up front reduces the amount that will have interest charges placed upon it. It also shortens the amount of time you’ll be paying interest on the loan. Consumer Reports recommends putting at least 15 percent down when you buy a vehicle—20 to 25 percent if you can afford it. Keep in mind that the best interest rates are reserved for buyers with excellent credit, so if your credit score needs improvement, putting down as much as possible is especially important.

        Don’t pay too much. If you paid more than a few percentage points over MSRP, consider what the car will be worth when you trade it in someday. For example, if you buy an SUV that depreciates $15,000 off the sticker price in three years, and you paid $5,000 over MSRP this year for it, that means it costs you $20,000 to own it for that short period. Cars are depreciating assets; overpaying for a new car is likely to compound your long-term losses. (See the worst car deals right now.) You don’t want to get a loan on a car that’s going to lose a lot of value over the next couple of years, or you may end up underwater on the loan, where you owe more than the car is worth for an extended period. This problem can compound when you buy your next vehicle if you end up having to roll old debt into the next loan.