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Average Down Payments for New Vehicles Continue to Rise in Q4, According to Edmunds


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SANTA MONICA, Calif., Jan. 5, 2021 -- Consumers in the financial position to buy a new car during the coronavirus (COVID-19) pandemic aren't holding back on upsizing their purchases in favor of bigger vehicles with more amenities. According to the car shopping experts at Edmunds, the average down payment for a new vehicle climbed to $4,734 in the fourth quarter, compared to $4,458 in the third quarter and $4,329 a year ago. 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 reveals that monthly payments increased, reaching $581 on average in the fourth quarter compared to $568 in Q3 and $570 a year ago.

Edmunds experts note that financed vehicle purchases in December helped drive these figures up compared to the third quarter. According to Edmunds data, December financed 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. 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."

Edmunds analysts note that some of the trends in the new car market continue to trickle down to financed used vehicle purchases as well. Although Edmunds data shows that the average down payment for a used vehicle slightly decreased in Q4 compared to Q3, it still represented a more than 22% increase year-over-year compared to Q4 of 2019. The average amount financed and average monthly payment also saw quarterly and yearly increases.

"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," said Caldwell.

Quarterly New-Car Finance Data

(Averages)



Q4 2020

Q3 2020

Q4 2019

Term

69.9

70.2

69.3

Monthly Payment

$581

$568

$570

Amount Financed

$35,373

$34,692

$33,525

APR

4.6%

4.6%

5.5%

Down Payment

$4,734

$4,458

$4,329

Quarterly Used-Car Finance Data

(Averages)



Q4 2020

Q3 2020

Q4 2019

Term

68.1

67.7

67.5

Monthly Payment

$437

$420

$415

Amount Financed

$24,406

$23,235

$22,611

APR

7.7%

7.9%

8.3%

Down Payment

$3,283

$3,308

$2,690

More insight into recent auto industry trends can be found in the Edmunds Industry Center at https://www.edmunds.com/industry/insights.html.