Jason Katz, a Managing Director and Senior Portfolio Manager at UBS, is set to appear on Varney & Company, sharing his market predictions for the latter half of this year.
In the first quarter, the average payment for a new car surged to an unprecedented level, as many American households struggle with affordability. According to LendingTree’s Q1 2026 report, which references data from Experian, the average monthly payment climbed 2.9% year-over-year, reaching a record high of $770.
Lease payments for new cars also saw a notable increase, with the average price rising 3.2% from last year to $619. Meanwhile, payments for used cars experienced a smaller increase of 1.5%, settling at an average of $531 per month.
For borrowers with varying credit scores, those identified as non-prime (scores ranging from 601 to 660) paid the most on average, with monthly payments hitting $811. Subprime borrowers (scores between 501 and 600) followed closely behind at $792.
Interestingly, down payments for new cars reached their lowest point in four years, highlighting the ongoing difficulty buyers face in securing affordable prices.
On the other hand, super prime borrowers (scores between 781 and 850) enjoyed the lowest payments, averaging $753 per month for new cars. According to Experian, the average loan amount for a new car in the first quarter stood at $43,925, which marks a slight rise from $43,582 in the previous quarter. In contrast, the average used car loan dipped to $27,070 from the prior $27,528.
Those in the key credit tiers (scores between 661 and 780) took out the largest loans, averaging $46,244 for new cars, while super prime borrowers purchasing used cars had an average loan amount of $29,599.
Experts in the auto industry caution that finding discounts is becoming rarer, and prices appear to be escalating quickly.
The increase in consumer loan balances can be partially attributed to soaring car prices, with new car prices up 0.2% year-over-year, while used car and truck prices experienced a 2% decline, according to the latest May CPI inflation data from the U.S. Bureau of Labor Statistics.
As per data from the New York Fed, total outstanding auto loan debt in the U.S. hit $1.685 trillion in the first quarter of 2026. This reflects a 57.3% increase since the first quarter of 2016, when the total was $1.71 trillion.
Home loans still dominate consumer debt in the U.S., making up 70.2%, while auto loans occupy 9% at $1.685 trillion—ranking just above student loan debt at $1.658 trillion.
In a notable move, Ford has announced a nationwide employee pricing initiative to celebrate America’s 250th anniversary.
In the first quarter of 2026, auto loan originations totaled $182.1 billion, a slight uptick from $180.8 billion in the fourth quarter of 2025, yet lower than last year’s peak of $187.9 billion seen in the second quarter.
The highest-ever total for auto loan originations occurred in Q2 2021, amounting to $201.9 billion, as reported by the New York Fed.
Borrowers in their 30s and 40s were the most active in taking out auto loans during the first quarter, with totals of $38.6 billion and $40 billion, respectively. Interestingly, this was just ahead of those in their 50s, who borrowed $38.3 billion.
Consumers aged 18 to 29 took out $25.3 billion in auto loans in the same period, matched by those in their 60s.
