⚡ Market Pulse: Loan doors open wider—but buyers pay the price

Hey everyone. Big thanks for all the feedback on last week’s Market Pulse. This started as a test, and because of your input, we’re making it better every week.

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— CDG

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⚡ Auto loan amounts are dipping—but the “new normal” means buyers are still borrowing thousands more than before.

New Car Amount Financed: ↓ 1.3% MoM | ↓ 1.3% YoY

Buyers financed slightly less on new cars in March, according to Edmunds.

But let’s be real…

The average amount—$41,043—is still more than $9K above 2019 levels, highlighting how far new vehicle prices have climbed, even as some monthly payments cool.

Used Car Amount Financed: ↓ 0.8% MoM | ↑ 1.9% YoY

The average amount financed on used cars ($28,249) dipped from February, but it's still higher than a year ago and nearly $3,300 above March 2019.

It’s a quieter kind of sticker shock—but it’s there.

⚡ Car payments are showing minimal relief amid high costs.

New Car Monthly Payment: ↓ 1.2% MoM | ↑ 0.1% YoY

The average new car payment slipped to $734 in March, according to Edmunds—a slight dip vs February.

No surprise there, as a record number of buyers are now stretching payments over seven years…

But zooming out, the picture’s still tough: payments are virtually flat compared to last year, and well above the $553 average in March 2019.

Used Car Monthly Payment: ↓ 0.4% MoM | ↑ 0.6% YoY

And looking at the used segment—the landscape isn’t much different.

Average used car payments hit $550 in March, not too different from February and a year ago, but well above the $406 average in March 2019.

⚡ Loan terms are holding steady—but more buyers are extending terms to shrink the monthly hit.

New Avg. Auto Loan Term: ↓ 0.2 MoM | ↓ 0.7 YoY

The average new car loan term came in at 69.4 months in March—right on script, and in line with the typical 67–70 month range, per Edmunds data going back to 2015.

But dig a little deeper, and a clearer trend starts to take shape, with nearly 1 in 5 new car loans running 84 months in Q1—up from 15.8% last year and just 13.4% in 2019.

Longer loans are becoming the go-to move for buyers chasing lower monthly payments, even if it means shelling out more in the long run.

That said—some suggest extending the term isn’t a bad idea, depending on the brand…

(Sourced from a CDG post on X)

Used Avg. Auto Loan Term: ↓ 0.1 MoM | ↓ 0.1 YoY

Keeping the pace—average used car loan terms held at 69.7 months, basically unmoved from February and a year ago.

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⚡ Auto APRs hold steady—but so do consumer pain points.

New Auto APR: Unchanged MoM and YoY

New car APRs held steady at 7.2% in March—unchanged from February and last year.

But like everything else—prices, payments, and insurance costs—APRs are still running high, and buyers are footing the bill.

Used Auto APR: ↑ 0.2 pts MoM | ↓ 0.4 pts YoY

The same goes for used car APRs, which crept up to 11.5% in March.

Even with a slight YoY cooldown, financing a used ride remains a pricey game.

⚡ Auto loan interest is adding up—no matter what you’re driving.

New Car Interest Paid: ↓ 1.9% MoM | ↑ 2.5% YoY

Buyers shelled out an average of $9,207 in interest on new car loans last month.

That’s a far cry from the $6,383 average back in 2019—and a reminder that even when payments cool a bit, the cost of borrowing is still running hot.

Used Car Interest Paid: ↑ 0.4% MoM | ↓ 1.9% YoY

Interest on used car loans reached $10,590 in March—nearly $4,200 more than in 2019.

In other words, used buyers are still feeling the sting of elevated rates, even when the sticker price looks (somewhat) better.

Securing an auto loan hasn’t been this easy since December 2022, according to Cox Automotive.

(That’s kind of a big deal...)

March saw a 3.1% YoY lift—thanks to higher approval rates, more subprime borrowers getting through the door, and heftier down payments easing the risk for lenders.

But let’s not call it a comeback just yet.

• The number of borrowers underwater on their loans jumped 40 basis points in March—and keeps climbing, according to Cox Automotive.

• Add to that the whirling tariff uncertainty and it’s anyone’s guess how long this window stays open.

For now, it's easier to get a loan—but the road ahead might not stay this smooth.

And some suspect it won’t…

(Sourced from a CDG post on X)

Financing trends might be shifting, but the squeeze is still real.

More buyers are underwater on their loans, and affordability is tough to come by.

The dealer edge?

Maintaining a lean days’ supply of used inventory, using lease options to give payment-conscious buyers a softer way in, and having a clear read on what’s moving—not just nationally, but in your market.

Thanks for reading everyone.

— CDG