Edmunds: Q4 Monthly Car Payments Expected to Break Records

The average monthly payment for new vehicles is expected to jump to $636 in the fourth quarter of 2021, up from $614 in the third quarter of the year and $581 in the last three months of 2020, according to car shopping experts at Edmunds.

Used car shoppers weren’t spared the price hike amid low demand, either, with a record-high $520 monthly average expected, up from $500 the previous quarter and $437 in the fourth quarter of 2020.

The uptick is likely in part because luxury shoppers are financing their purchases more often than leasing the vehicles these days, according to Edmunds data, with new vehicle penetration down from 31% in December 2019 to 23% two years later.

Dealer financing was about 46% of Audi sales in the fourth quarter of 2021 compared to 34% one year earlier. Lexus saw its dealer-financed purchases go from 26% in the fourth quarter of 2020 to 45% in the most recent quarter, according to Edmunds.

“Leasing and luxury historically have gone hand in hand, but that trend is drifting away as automakers have less reason to incentivize leasing amid inventory shortages,” said Jessica Caldwell, Edmunds’ executive director of insights, in the company announcement.

“Affluent luxury shoppers are likely feeling comfortable with financing their pricey purchases instead since interest rates are so low,” she said.

The silver lining for car shoppers who are about to be blasted by sticker shock: dealers are more likely to offer lower annual percentage rates with the overall cost of vehicle ownership at record levels these days.

Related: High New and Used Car Prices Keeping Pedal to the Metal Until Production Catches Up

Vehicle valuation and automotive research company Kelley Blue Book (KBB) put the average used car price above $27,000 for the first time in history at the end of 2021, up 41% from November 2019, which KBB notes is the last month before the COVID-19 pandemic began with the first case.

Edmunds, meanwhile, says the average used car will set buyers back more than $29,000.