How Much Is The Average Car Payment In The U.S.?

For a new car, you can expect to pay well over $700 and for a used car, around $550. But this is based on factors like your credit score, the state where you live, and the terms of your purchase.

Average Car Payment in the U.S. 2024

According to the State of the Automotive Finance Market Report: Q4 2022, the average car payment in the US has increased 11.5% between 2023 and 2022, on new vehicles and 11.2% on used vehicles.

• $730: The average monthly car payment in the US for the first quarter of 2023 was $730 for a new car.
• $717: The average monthly cost for the fourth quarter of 2023 was $717.
• $659: In 2021, the average monthly payment for a new car was $659.
• $551: The average monthly car payment in the US for the first quarter in 2023 for a used car was $551.
• $563: The average monthly cost for a used car for the fourth quarter of 2023 was $563.
• $530: In 2021, the average monthly payment on a used car was $530.
• $716: The average monthly payment for a new car was $716 in the final quarter of 2022, up from $646 the year prior.
• $526: The average monthly payment for a used car was $526 in the last quarter of 2022, up from $490 the year prior.
• 15.7%: 15.7% of consumers who received an auto loan for new cars have monthly payments of $1,000 or more which is the highest it’s ever been, up from 10.5% in 2021 and 6.7% in 2020.
• 5.4%: 5.4% of consumers who received an auto loan for a used car have monthly payments of $1,000 or higher, also a record high, up from 3.9% in 2021 and 1.5% in 2020.

Source: State of the Automotive Finance Market Report: Q4 2022; Edmunds

Average Down Payments

Americans under the age of 50 are taking out an average of 32.3 billion dollars in auto debt every month and those over the age of 50 taking out another 20.6 billion dollars. The amount that’s being taken out fluctuates from consumer to consumer based on the down payment.

• $6,780: The average down payment in 2022 was $6,780 for new and used vehicles, up from $3,921 the year before.
• 16%: Research indicates that more shoppers are choosing to purchase luxury vehicles rather than take out an auto loan, with 16% more people purchasing a car instead of leasing a car.

Source: Edmunds

Trade-in Value Against Car Payments

In 2020, consumers were able to trade in vehicles with higher equity and use that toward reducing the costs of their average car payments on a new or used vehicle, but that is no longer the case. Rising interest rates and the diminished value on used cars has significantly reduced the trade-in equity in 2022.

• 17.4%: 17.4% of new vehicles had a negative equity trade in value in 2022, compared to only 14.9% in the previous year.
• $5,341: Consumers owed an average of $5,341 in 2022 on upside down loans compared to $4,141 in 2021.

Source: Edmunds

Average Car Loan Amounts

According to the Federal Reserve Bank of New York, auto loan debt is the third biggest category for Americans representing 9.2% of total consumer debt.

• $53.9: Americans take out $53.9 billion in auto loans for new cars each month so far in 2023.
• 4.04%: The average loan amount on a new car has increased 4.04% in the last quarter of 2022, compared to the same quarter in 2021.
• $35,420: New vehicle average loans went from $35,420 in 2020 to 39, 834.2021, up to $41,445 in 2022.
• 3.14%: Interest rates on new vehicles increased from 3.14% on average in 2021 to 5.45% on average in 2022.
• 1.38%: The average loan amount for a used car has increased 1.38% during the same time frame.
• $27,768: Used vehicle average loans went from $22,643 in 2020 to $27,390 in 2021, up to $27,768 in 2022.
• 7.03%: Interest rates on used cars or even higher than interest rates on new cars, jumping from 5.08% in 2021 up to 7.03% in 2022.

Source: State of the Automotive Finance Market Report: Q4 2022; Federal Reserve Bank of New York

Average Car Debt

According to the Federal Reserve Bank of New York, the average term for an auto loan on new cars has increased to 68.6 months and 67.4 months for used vehicles. Baby Boomers are more likely, out of all generations, to buy new vehicles. And Gen Z, by comparison, has the lowest percentage of new car purchases.

• 4.7%: 4.7% of car loans in 2023 are more than 90 days late.
• 7%: 7% of car loans in 2023 are more than 30 days late.
• $19,313: Gen X has the highest average of vehicle loans and the highest car debt amounting to an average of $19,313.

Source: Federal Reserve Bank of New York

Average Car Payment by Loan

The type of loan directly influences the average car payment no matter where you live. The longer the term of the loan the lower the monthly payment in most cases. However, with a longer term loan, that lower monthly payment also means increased interest over the longer lifespan.

Short-term loans might have higher monthly payments but they also have less interest over a shorter time frame so they cost less overall.

Below is a table comparing a $15,000 loan at 6% interest and what the average monthly payment is:

Source: State of the Automotive Finance Market Report: Q4 2022

Average Car Payment by Credit Score

Credit scores are still significantly influencing things like interest rates on loans for new or used vehicles. Below is a table that compares the average car payment for new and used vehicles based on credit score category:

Source: State of the Automotive Finance Market Report: Q4 2022

Average Car Payment by State

Not all states are created equal, where car payments are concerned:

• Louisiana has the highest average car payment in the US for new cars.
• New Hampshire has the lowest average car payment in the US for new cars.
• Louisiana also has the highest average car payment for used cars.
• Montana has the lowest average car payment in the US for used cars.

The table below shows a quick breakdown of some of the average new and used monthly car payments across different states based on the Blue Book average values on new and used cars:

Source: Kelley Blue Book

Reasons for Rising Average Car Payments in the US

Why have rates risen? Several things:

1. First, the Federal Reserve has continued to struggle with inflation, meaning the rates for car payments keep going up with inflation.
2. Second, the rates for new car costs are, simply put, much higher.

Why are they higher?

• According to the New York Times, there remains a shortage of the computer chips used in the manufacturing process for new cars.
• An earthquake in Japan disrupted production.
• The war in Ukraine continues to cause supply chain disruptions.

These factors (and more) have directly impacted the rates of average car payments in the US for new cars. However, the prices of new cars have also had a trickle down effect on the prices of used cars, keeping them higher as a direct result of demand.