Presented by:
Hey everyone,
Today, Fred Timbrook, CEO at Timbrook Automotive, joined us for an episode of the CDG Podcast.
We dive into Fred's unique diversification into powersports, the intense efficiency required to run a high-volume collision center, and the personal philosophy of a dealer who also serves as a senior pastor.
— CDG
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Welcome to the Market Pulse—your cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
84-month loans are reaching an all-time high share of new-vehicle purchases: Loans of 84 months or longer now account for 22.9% of all financed new-vehicle deals in Q1 2026.
Meanwhile, monthly payments are climbing to record levels: The average monthly payment hit $773 in Q1 2026, a new all-time high.
And down payments are falling to near-historic lows: The average down payment dropped to $6,206 in Q1 2026, one of the lowest first-quarter figures since 2022.
(Source: Edmunds Q1 2026 / Carvana Auto Receivables Trust 2026-P1 via Finsight)
84-month loans are accounting for a record share of new-vehicle purchases.
New vehicles have never cost more to finance.
In fact, the average amount financed hit a record $43,899 in Q1 2026, and monthly payments reached a record $773. For a lot of families, that's their second-biggest monthly bill, right behind a mortgage.
To make those payments work: Buyers are stretching the term.
According to Edmunds, loans of 84 months or longer now account for 22.9% of all financed new-vehicle purchases, an all-time high.
Knowing this, we looked at Carvana's 2026 asset-backed securities (ABS) data alongside Edmunds' Q1 report to see how this trend compares.
For context, most new-vehicle loans in Carvana's portfolio are written at 84 months, with original loan amounts typically between $40,000 and $90,000.
Here’s what we found: On trucks and higher-trim SUVs, the 84-month structure is close to standard. It's not because buyers are being reckless so much as it is that term length is the only lever most of them have left.
NOTE TO DEALERS:
There are several ways to navigate this, but if your store isn't working from a specific plan, you're winging it far too much to build loyalty with customers navigating prices like these.
Show buyers what their monthly payment actually costs in total interest over seven years, before someone else does.
Flag gap coverage early on any deal at or near vehicle value.
Or know which used models make strong alternatives.
Just have a plan. Because when customers come in, they should feel like their deal was built around their actual wants, needs, and finances.
Falling down payments are pushing loan-to-value ratios above the vehicle's purchase price.
When buyers are focused entirely on hitting a monthly payment, the rest of the deal structure often gets compressed. And the down payment data we looked through shows exactly where.
The stats: Average down payments fell to $6,206 in Q1 2026, one of the lowest first-quarter levels since 2022.
Combine that with record loan amounts, and you get loan-to-value (LTV) ratios (the percentage of the car's price being financed) exceeding 100% for many popular models.
When LTV hits 100%, buyers are borrowing more than the car is worth on day one.
CDG analysis via Joe Cecala
As the chart shows, the Jeep Grand Cherokee L and Wrangler 4 Door are running 103%–107% LTV.
The Ram 2500 Crew Cab, meanwhile, is more moderate on LTV but generates the highest total interest cost of any model in the dataset, averaging about $23,550 over the life of the loan.
WHY IT MATTERS:
There's no rate relief hiding in the background either, because the average annual percentage rate (APR) is 6.9%, and promotional 0% financing is showing up on just ~2.6% of loans.
Point being: Not every 84-month deal costs the same. The models carrying the most long-term interest exposure are already in your data, and knowing which is which is how your store builds loyalty despite the affordability woes out there.
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I recently spoke with Shane Wood, General Manager at Bruce Titus Automotive Group, and Justin Searle, dealer insights expert at Edmunds, about how they're each reading the Q1 data.
Here are their Dos and Don'ts:
Do: Treat extended terms as an affordability tool, not a compromise.
Wood says his group is “embracing” the 84-month trend. Here’s his take…
"Cars are not getting cheaper but affordability is at a critical point. The benefits that come from selling a customer something they can afford and say yes to strongly outweigh the downside of an extended term.”
Shane Wood
He went on to add that Ford is specifically leaning into this reality, and that in one meeting, they even presented “strong data” suggesting that customers are often more loyal to shops that can get them into an extended loan (within reason).
Do: Surface the full picture before the buyer reaches the F&I office.
Searle agrees on the affordability reality, but points to where the trust gets built or broken.
"Dealers who surface that reality early in the conversation, before the customer visits the F&I office, are the ones building trust,” Searle shared with CDG. “The most important shift is bringing financial transparency to the forefront of the conversation.”
Justin Searle
He added: “That means asking the hard questions about down payments and loan-term flexibility early in the process, rather than blindly serving numbers at the end."
Don’t: Treat bank approval as the limit of what you disclose.
“By providing full disclosure on finance charges, interest rates, and loan-to-value (LTV) ratios, regardless of bank approval, dealers begin to move away from high-pressure tactics toward a relationship built on trust.”
The goal, as Searle put it, is “to guide shoppers.”
His reasoning: “When you lead with transparency and show genuine concern for helping someone make a smart financial decision, the guard comes down. You stop being a salesperson and become a consultant, which is how you build a healthy, productive relationship that lasts longer than a single transaction."
The question for dealers isn't whether to offer 84-month terms, because buyers will find those elsewhere.
It's whether your store is the one having an honest conversation about what those terms actually mean.
A buyer who understands the negative equity exposure on their Ram 2500, gets gap coverage, and comes back to trade in year four is worth more than one who's underwater and blames you for it.
In other words: This market rewards transparency. So offer that.
The latest updates to the CDG Buy/Sell Tracker.
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