Average Car Payment in America

Understanding average car payments helps you gauge whether your payment is reasonable and competitive. Here's what Americans are paying for vehicles in 2024.

Current Average Payments

New Vehicles:

**Average payment**: $725/month

**Average loan amount**: $40,290

**Average interest rate**: 7.2%

**Average loan term**: 68 months

Used Vehicles:

**Average payment**: $523/month

**Average loan amount**: $27,250

**Average interest rate**: 11.4%

**Average loan term**: 66 months

Historical Trends

Average new car payment by year:

2020: $563

2021: $592

2022: $648

2023: $716

2024: $725

**Why the increase?**

Higher vehicle prices

Rising interest rates

Longer loan terms

Supply chain issues

Payment by Credit Score

**New Vehicle Purchase:**

Super Prime (720+): $661/month

Prime (660-719): $712/month

Nonprime (620-659): $751/month

Subprime (580-619): $797/month

Deep Subprime (<580): $833/month

Loan Term Trends

**Distribution of loan terms:**

36 months or less: 3%

37-48 months: 10%

49-60 months: 32%

61-72 months: 38%

73-84 months: 17%

Over half of borrowers are choosing 61+ month loans, which increases total interest paid significantly.

Down Payment Averages

**New vehicles:**

Average down: $6,800 (14% of price)

20% put $0 down

30% put 20%+ down

**Used vehicles:**

Average down: $3,800 (11% of price)

30% put $0 down

25% put 20%+ down

What This Means for You

If Your Payment is Above Average

Consider:

Were you pushed into a longer term?

Is your interest rate competitive for your credit score?

Did you minimize your down payment?

Are you financing add-ons and extended warranties?

Could you refinance to a better rate?

If Your Payment is Below Average

You likely negotiated well

Your credit score helped

You chose a more affordable vehicle

You made a good down payment

The Problem with High Payments

45% of Americans with car payments report:

Difficulty making payments

Having to cut other expenses

Regretting the purchase

Considering selling/trading

Financial Strain:

$725/month = $8,700/year

For median household ($75,000): 11.6% of gross income

**Recommended maximum**: 10%

Negative Equity Statistics

**Average negative equity**: $6,054

**18% of trade-ins** have negative equity

Average has increased 30% in 3 years

Regional Differences

**Highest average payments:**

California: $782/month

Texas: $761/month

Florida: $748/month

**Lowest average payments:**

Iowa: $651/month

Wisconsin: $663/month

North Dakota: $672/month

How to Pay Less Than Average

1. **Buy used**: Save $200/month on average

2. **Improve credit score**: Save $100-200/month

3. **Make larger down payment**: Reduce payment by $15-20 per $1,000 down

4. **Choose shorter term**: 48 vs 72 months increases payment but saves thousands in interest

5. **Shop multiple lenders**: Rates can vary by 2-3%

6. **Negotiate price**: Every $1,000 off price = ~$20/month savings

7. **Skip add-ons**: Warranties, GAP, protection packages add $50-100/month

Expert Recommendations

Financial advisors suggest:

**Maximum payment**: 10% of gross income

**Maximum loan term**: 60 months

**Minimum down payment**: 20%

**Target debt-to-income**: Under 36%

Example:

If you make $60,000/year:

Gross monthly: $5,000

Max payment: $500

Max vehicle price: ~$27,000 (with 20% down, 6% APR, 60 months)

The Bottom Line

Just because the average payment is $725 doesn't mean you should spend that much. The average American is over-spending on vehicles, leading to financial stress.

Calculate what **you** can afford using our Car Affordability Calculator, not what others are paying.