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Monthly Car Loan Payments Top $700 in July

car, sales, prices, loan

For the first time ever, monthly car payments exceeded $700 in July.

Dealers are now offering fewer and smaller discounts on vehicles as prices continue to rise and interest rates on loans rise steadily, he said. Thomas King from JD Power in a report at TheStreet on Wednesday (July 27). King is the president of the data and analytics division at the Michigan-based data analytics firm.

“The average monthly financial payment in July is on track to hit a record high of $708, up $81 from July 2021,” he said.

The record high monthly payments are coming from consumers looking for bigger vehicles and longer loans Greg McBridechief financial analyst for financial data firm bank rate.

“The limited supply of dealer lots has pushed sticker prices and loan amounts to levels previously unseen,” noted McBride.

Related: New car payments exceed $1,000 for 12% of buyers amid supply chain chokes

Earlier this month, PYMNTS reported that the average monthly payment for new luxury cars has risen, with more than 12% of consumers who finance a car paying more than $1,000 per month. The figure represents a 7.3% increase in payment from June 2021.

The increase has not dampened the appetite of luxury car buyers. But it won’t be achievable for everyone, with Jessica Caldwell, executive director of insights at auto shopping guide Edmunds, noting that many consumers will find new cars beyond their financial reach.

Earlier this month, CNBC reported that the average annual rate is now 5% for a new car loan for the first time since early 2020. This is up from 4%, and the report noted that consumers will now pay $1,324 more in interest over the period of a $40,000, 72-month auto loan.

According to data from the US Bureau of Labor Statistics, new car prices are up 12.6% from a year ago, while used cars are 16.1% more expensive.

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