On the Dash:
- Nearly 1 in 5 new vehicle loans now carries a monthly payment of $1,000 or more, according to Experian.
- More than a third of new vehicle loan terms now stretch past six years.
- EV financing fell sharply in Q1 2026 as hybrid vehicle financing continued to grow.
Monthly auto loan payments on new vehicles keep climbing. For nearly one in five buyers, they now top $1,000.
According to Experian’s State of the Automotive Finance Market Report: Q1 2026, nearly 19% of new-vehicle loans have a monthly payment of $1,000 or more. Most of those, 74%, are not for luxury models, but popular pickups and SUVs. That’s a sharp increase from 2019, when loans with $1,000-plus monthly payments made up just 4.40% of the market.
Longer auto loans, the new normal
Buyers are also stretching their loan terms, with more than a third, 35.55%, of all new vehicle loans now extending past six years. Loans exceeding 85 months grew from 2.95% to 3.33% year-over-year. The trend is similar for used car buyers, with 31.54% of those terms now exceeding six years, up from 28.6% a year ago.
“Affordability continues to shape financing decisions across the automotive market. While shoppers continue to lean toward larger, more expensive vehicles, we’re seeing more consumers take advantage of longer-term loans to offset rising monthly costs,” Melinda Zabritski, Experian’s Head of Automotive Financial Insights, said in a statement.
The average new vehicle loan reached $43,925 in Q1 2026, up $2,150 year-over-year. Average monthly payment rose from $748 to $770 over the same period. On the used side, loan amounts grew $785 from this time last year to $27,070, and average monthly payments rose from $523 to $531.
Some relief in refinancing
Some buyers are finding relief through refinancing. Consumers who refinanced during the first quarter of 2026 trimmed an average of 2.2% off their interest rate, dropping from 10.29% to 8.05%. That saved an average of $81 per month. Credit unions led refinancing activity with a 63.43% market share. Consumers who refinanced with a credit union saved $101 per month on average, compared to $60 for those who went with a bank.
Delinquency rates are rising, but remain manageable. Thirty-day delinquencies increased to 2.00% in Q1 2026, up from 1.95% in Q1 2025. Sixty-day delinquencies grew from 0.83% to 0.86% year-over-year. Subprime borrowers are driving that growth. Subprime financing reached 15.75% of total vehicle financing in Q1 2026, up from 14.40% a year earlier. As CBT News reported in March, lenders have been expanding credit access during the first quarter. The Dealertrack Credit Availability Index rose to 101.3 in February 2026, its highest level since June 2022.
“While consumers are benefiting from improved refinancing conditions, we’re also seeing broader financing accessibility emerge. There continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market,” Zabritski said.
EV financing falls
EV financing fell sharply in Q1 2026, dropping from 10.93% of new vehicle financing to 6.23% year-over-year. Hybrid financing grew from 12.08% to 14.90% over the same period.
Looking back at full-year 2025, the share of new vehicle loans carrying $1,000-plus payments stood at 17.61%, up from just 4.40% in 2019. Non-luxury EVs generated the lowest average new vehicle payment of any segment in 2025, a dynamic that could attract more budget-conscious buyers toward electrification as off-lease EV inventory grows. Experian projects total off-lease volume to peak at 3.3 million units in 2027.
