U.S. consumers in a healthy financial position to purchase a vehicle amid the pandemic are not holding back when it comes to upsizing to a larger vehicle with more amenities, according to Edmunds.
Their data shows the average down payment for a new vehicle jumped to $4,734 in the fourth quarter of 2020, compared to $4,458 in the third quarter and $4,329 a year earlier. Financing on average was also up for new vehicles, reaching $35,373 in Q4 compared to $34,692 in Q3, and $33,525 a year earlier. Monthly payments have also increased.
“Consumers historically lean toward purchasing pricey luxury cars, trucks and SUVs during the holiday season, which is partially why we’re seeing this lift,” said Jessica Caldwell, Executive Director of Insights at Edmunds. “But we’re also just seeing a broader trend of consumers gravitating toward bigger purchases during the pandemic.”
December helped boost downpayment figures compared to Q3, with the last month of 2020 representing the highest average monthly payment of the year for financed purchases, at $587. It was also the highest average down payment of the year at $4,876.
Caldwell said the data may seem off when considering unemployment levels and tough financial conditions, but that consumers who are buying new vehicles amid the crisis “are clearly on the other side of the economic divide.”
“They’re likely qualifying for the lowest promotional rates and feeling secure enough to put down more money to get the bigger vehicles and features that they want,” said Caldwell.
“We’re seeing more consumers who typically would fit the bill as new-car shoppers turning their focus on the used car market thanks to a good supply of near-new, off-lease vehicles hitting the market,” said Caldwell.
