New
Used

What car are you interested in?

Don't worry, you can change your mind later on.

Sign Up Log in

The 2025 Car Market in 5 Unbelievable Figures

Key Takeaways

  • Car prices are returning to record highs after a year of declines.
  • Monthly payments are on par with mortgage payments for many.
  • Negative equity is a growing problem, especially for those with longer auto loans.

From soaring monthly payments to record-high car prices, navigating 2025’s automotive landscape requires more insight than ever. For many, owning a car is starting to feel more like owning a second mortgage. These five shocking numbers reveal just how much the car market has changed – and what it means for buyers trying to make smart financial decisions.

$756: Car Payments or Mortgage Payments?

In 2025, the average monthly payment for a new car is $756. While this figure represents a 5% drop from the peak of $795 in December 2022, it’s still alarmingly high. To put things into perspective, thirty years ago, the average American mortgage payment was comparable to what today’s drivers are paying for a car. With rising interest rates and longer loan terms, it’s no wonder car payments are creeping toward levels traditionally reserved for homeownership.

➡️ Save when you negotiate with leverage using free Dealer Invoice Pricing

$49,740: New Car Prices Are Near Record Highs

The average price of a new car in 2025 has climbed back to $49,740, just shy of the all-time high reached in 2022. Meanwhile, used car prices have seen a more noticeable decline. At $25,721, the average price of a used car in 2025 is down from pandemic-era highs, but still steep by historical standards.

If you’re shopping for a used car, now might be the time to strike. Check out this week’s Used Car Price Update to see how prices are trending in your area.

1 in 5: Monthly Car Payments Exceeding $1,000

Data from Q4 2024 reveals a startling reality: one in five new car buyers is now saddled with a monthly payment exceeding $1,000. This unprecedented figure from Edmunds underscores a growing trend of car buyers treating auto loans like a second mortgage.

Adding to the financial strain, luxury car sales surged to record highs last year. In December 2024, 84,000 new vehicles sold for over $80,000, the highest volume ever recorded, according to Kelley Blue Book. In fact, luxury cars made up 6% of all new vehicle sales in 2024, a clear sign that high-end vehicles are driving up market averages. Check out the latest New Car Price Trends for a deeper dive into the numbers.

14%: Used Car Loan Rates Are Sky High

The average interest rate for a used car loan in early 2025 stands at a staggering 14% APR. For new cars, the average loan rate is slightly better at 9% APR. While zero percent financing offers are still available for buyers with excellent credit, they’re becoming increasingly rare. Cox Automotive data shows that fewer than 5% of new car loans are secured at 0% APR financing, making affordable rates harder to come by in today’s market.

-$8,485: The 84-Month Trap

A record number of car buyers are opting for 84-month loans in 2025, with 7% of all buyers financing their vehicles over seven years. While these extended loan terms lower monthly payments, they often result in substantial negative equity. According to the latest CarEdge Negative Equity Survey, drivers with 84-month loans have a median vehicle equity of -$8,485, compared to the overall market median of $2,795.

Longer loan terms may seem like an easy way to make a new car affordable, but they’re leaving thousands of buyers underwater. Negative equity not only limits trade-in flexibility but also sets drivers up for financial stress if they want to sell their car before the loan is paid off.

Empowered Car Buyers Save More

2025 car market update

The numbers don’t lie: buying a car in 2025 is marked by steep payments, rising prices, and growing financial risks for many buyers. Whether you’re shopping for a new car, considering a used one, or weighing the pros and cons of your financing options, knowledge is your best tool. CarEdge is here to help you navigate these challenges with data-driven insights and expert guidance

Ready to take control of your car-buying journey? Explore CarEdge’s free tools to find the best deals, negotiate with confidence, and avoid costly mistakes. We’re real people helping drivers everywhere save real money. Happy car shopping!

🚗 Learn more about how CarEdge can help you save the most in 2025.

Save time and skip dealership!

Our concierge service can find any car for you.


Want to do it yourself?

Try Insights. Data and tools to help you research.


Last updated Jan 28, 2025

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *