4 more Edmunds insights about $1,000 monthly payments

Edmunds drilled deeper into its third quarter auto finance data on Wednesday, looking closer at consumer who are making a monthly payment of more than $1,000.

Analysts found four more intriguing trends, including:

• More than one in four consumers who financed an electric vehicle committed to a monthly payment of more than $1,000. And Edmunds said 26% of consumers who financed an EV committed to a $1,000-plus monthly payment, compared to 24% of consumers who financed a plug-in hybrid, 14% who financed a gas-engine-only vehicle, and 4% who financed a hybrid vehicle.

• Two mainstream brands known for their popular truck offerings made it to the top 10 list of makes that commanded the greatest share of $1,000-plus monthly payments. Though luxury brands dominate the list, GMC earned a No. 7 spot with 41% of its shopper base committing to a $1,000-plus monthly payment and Ram took the No. 10 spot with 36% of its shopper base committing to a $1,000+ monthly payment.

• Large trucks and large SUVs dominated the top 10 list of models that commanded the greatest share of $1,000 monthly payments. Ford F-150, Ram 1500 and Chevrolet Tahoe captured the highest percentage of monthly payments over $1,000. The Ford F-150 made up 5.6% of all new vehicle loans made in Q3 with a $1,000 monthly payment.

• States with consumers that favor large truck purchases are leading the country in the greatest share of $1,000 monthly car payments. Wyoming, Texas and Utah had the greatest percentage of new-car shoppers who agreed to a monthly payment above $1,000 (25.7%, 20.8% and 19.1%, respectively).

“Despite worrisome macroeconomic conditions, Americans are spending more money than ever on new vehicle purchases,” Edmunds executive director of insights Jessica Caldwell said in a news release. “Ongoing inventory shortages are partly to blame, but this trend is also a reflection of consumer preferences.

“In the past decade, we’ve seen Americans embrace a bigger-is-better mindset by gravitating toward larger vehicles with more creature comforts, technology-heavy features and, more recently, electrified powertrains — but that all comes with added cost. Rising interest rates combined with higher prices has sent monthly payments soaring to new heights,” Caldwell continued.

Edmunds director of insights Ivan Drury added his perspectives about what elements might contribute to this $1,000 trend intensifying even more.

“A pullback of lease incentives is yet another contributing factor to these rising payments,” Drury said. “As leasing grows increasingly more expensive, more affluent consumers are instead opting to finance luxury brands and large vehicles.

“And with few lease or finance incentives expected from automakers in the coming months, and yet another rate hike by the Fed anticipated in November, we expect  that monthly payments topping $1,000 will become even more common,” he went on to say.

Share of $1,000+ Monthly Payments by Make (Q3 2022)

Share of $1,000+ Monthly Payments by Model (Q3 2022)

Source: Edmunds