Down Payments ‘Plunge,’ Loan Terms Stretch
New-vehicle financing trends in Q3 2025 continue to underscore the affordability challenges facing car shoppers, according to the latest analysis from Edmunds.
Edmunds’ Q3 2025 data on financed vehicle purchases shows the average down payment for new-car purchases dropped to $6,020, the lowest level since Q4 2021. This compares to $6,433 in Q2 2025 and $6,619 in Q3 2024. The share of buyers committing to monthly payments of $1,000 or more accounted for 19.1% of all financed new-car transactions in Q3, near the record set last quarter at 19.3%. For used vehicles, $1,000+ monthly payments hit a record high of 6.1%, up from 5.6% in Q2.
Edmunds analysts report that 84-month or longer loans made up 22% of financed new-car purchases in Q3, slightly down from 22.4% last quarter and 18.5% in Q3 2024. The average amount financed for new vehicle purchases rose to $42,647 in Q3, up from $42,388 in Q2 2025 and $40,713 in Q3 2024.
The average annual percentage rate (APR) for new vehicle purchases held at 7% in Q3 — marking the third straight quarter this figure was at or above 7%. Edmunds analysts say that promotional financing was limited in Q3: Just 3.4% of loans carried a 0% rate while 18.3% of loans carried rates below 4%. By contrast, 71.6% of loans carried an APR of 5% or higher, and 13.8% were at an APR of 10% or higher. Edmunds analysts note that the Fed’s late September rate cut came at the end of the quarter and thus did not have a significant effect in Q3.