More car buyers are taking on seven-year loans to keep up with rising sticker prices.
Here's what to know
Click2Houston reported that Edmunds' Oct. 1 analysis showed buyers taking on larger loan balances and higher monthly bills while remaining in auto debt for longer.
Edmunds said the average monthly payment on a financed new car hit a new high of $787.
In the third quarter of 2026, buyers financed an average of $44,664 on new vehicles, up from $44,156 in the second quarter of 2026 and $42,744 in the third quarter of 2025.
Loans stretching to 84 months or more made up 25.5% of financed new-vehicle purchases in the third quarter, compared with 23.9% in the second quarter of 2026 and 21.8% in the third quarter of 2025, Edmunds found.
That works out to roughly one in four buyers stretching payments across seven years or more.
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Edmunds also reported a record 21.2% of buyers with monthly payments above $1,000, up from 20.3% in the second quarter of 2026 and 19.1% in the third quarter of 2025.
Of those buyers, 69% went with loan terms of 72 months or longer.
The average APR on a new-car loan was 7% in the third quarter of 2026, the same as in both the second quarter of 2026 and the third quarter of 2025, according to Edmunds.
More background
The biggest trade-off with a longer auto loan is that it can lower the monthly bill while increasing the car's total cost.
Interest costs also hit a record. Edmunds said average lifetime interest on a financed new-car purchase reached $9,938 in the third quarter, up from $9,811 in the second quarter of 2026 and $9,442 in the third quarter of 2025.
For used vehicles, the average monthly payment on a financed purchase reached $582, up from $576 in the second quarter of 2026 and $566 in the third quarter of 2025. The average financed amount for a used vehicle was $30,703. Edmunds said the average APR for used-car borrowers was 10.6%.
Focusing only on the monthly payment can obscure how expensive the loan becomes by the final payment.
What can be done?
Edmunds' main advice is to evaluate the total cost of the loan, not just the monthly payment.
The report specifically recommended considering the down payment, interest rate, and loan term together.
It also said that extending repayment can make a vehicle feel more affordable at first, but it increases interest costs over time.
Edmunds also recommended comparing financing offers. With the average new-car APR at 7% and the average used-car APR at 10.6%, even a modest rate difference can significantly change the total amount paid over the life of the loan.
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