Edmunds data shows widening gap between new and used financing metrics

The financing metrics Edmunds compiled and shared this week might have reinforced why more budget-limited consumers likely made a used-vehicle purchase rather than going for a new model.

According to Edmunds data, December financed new-car purchases represented the highest average monthly payment of the year at $587 and the highest average down payment of the year at $4,876.

“Consumers historically lean toward purchasing pricey luxury cars, trucks and SUVs during the holiday season, which is partially why we’re seeing this lift. But we’re also just seeing a broader trend of consumers gravitating toward bigger purchases during the pandemic,” said Jessica Caldwell, Edmunds’ executive director of insights.

“It might seem at odds with unemployment levels and the harsh financial conditions that so many Americans are finding themselves in right now, but the consumers who are buying new cars during the pandemic are clearly on the other side of the economic divide,” Caldwell continued. “They’re likely qualifying for the lowest promotional rates and feeling secure enough to put down more money to get the bigger vehicles and features that they want.”

As Caldwell noted, consumers in the financial position to buy a new vehicle during the coronavirus pandemic aren’t holding back on upsizing their purchases in favor of bigger vehicles with more amenities.

Expanding the timeframe of its analysis, Edmunds discovered the average down payment for a new vehicle climbed to $4,734 during the fourth quarter, compared to $4,458 in the third quarter and $4,329 a year ago.

Analysts found that the average amount financed for new vehicle purchases increased as well, climbing to $35,373 in the fourth quarter compared to $34,692 in the third quarter and $33,525 a year ago.

And Edmunds data showed that monthly payments increased, reaching $581 on average in the fourth quarter compared to $568 in Q3 and $570 a year ago.

Now let’s compare those new-model figures to what Edmunds pinpointed in the used market.

Analysts pegged the average down payment at $3,283 during Q4, rising by $593 year-over-year and representing an increase of more than 22%.

Edmunds indicated the average amount financed for a used-vehicle delivered in the fourth quarter came in at $24,406, creating an average monthly payment of $437.

“We’re seeing more consumers who typically would fit the bill as new-car shoppers turning their focus on the used-car market thanks to a good supply of near-new, off-lease vehicles hitting the market,” Caldwell said.

Quarterly New-Car Finance Data

(Averages)

Quarterly Used-Car Finance Data

(Averages)

Source: Edmunds