The data: The average monthly payment for a new car hit $760 in November 2025, according to a J.D. Power estimate, and monthly payments are causing consumers to stretch loan terms from 48-60 months to 72 months. In the meantime, the average new car price has hovered slightly below $50,000.

Zoom out: Consumers’ financial health is wobbly, and credit quality is declining. Mortgage and auto loan delinquencies are rising, as is the proportion of consumers with subprime credit scores. And recent data shows increases in student loan delinquencies as payments resume, with consumers prioritizing repaying student debt over mortgages and auto or personal loans.

Meanwhile, the total cost of car ownership continues to rise alongside purchase prices. Forty-four percent of claimants saw a price increase on their auto insurance premiums in the last 12 months, per an August 2025 J.D. Power survey, and the mix of cars on the road is reportedly raising repair costs.

Our take: Financial institutions will be on the receiving end of problems in consumer credit. Falling interest rates may offer some reprieve as prices for new and used cars stabilize, but $50,000 cars aren’t cheap by any measure.

Beyond tightening credit standards and keeping rates competitive, banks can mitigate risk by embedding financial advice and repayment planning into loan management. This could prevent some consumers from making unwise borrowing decisions or missing payments.