Car Payments Are Becoming a Second Rent Check

A costly new normal

If it feels like buying a new car now comes with a rent-sized bill every month, the numbers back you up. New data from credit reporting agency Experian shows the average monthly payment on a new vehicle in the U.S. has climbed to $748—a level that would have sounded absurd less than a decade ago.

According to Experian’s report, which runs through the third quarter of 2025, the typical new car now sells for $42,332. With average interest rates at 6.56 percent, it doesn’t take much math to see how monthly payments are ballooning. Buyers are also leaning heavily on longer loan terms to make those payments manageable. The average new-car loan now stretches to 69 months, and about 81% of new vehicles purchased this year were financed.

What’s perhaps more unsettling is how stable this has become. Average payments have hovered around the low-to-mid $740 range since midyear, suggesting this isn’t a temporary spike or seasonal blip. The wild price swings of the pandemic era have largely settled—but they’ve settled at a much higher level than before.

Used cars offer less relief than you’d expect

Used vehicles still come with lower monthly payments, but “lower” doesn’t mean cheap. Experian says the average used-car payment reached $532 in the third quarter of 2025. That figure is tied to an average transaction price of $27,128, a number that would have seemed extravagant only a few years ago.

The bigger issue for used buyers is interest. Average rates on used-car loans now sit at a punishing 11.40 percent, more than four points higher than rates for new vehicles. Loan terms are only slightly shorter, averaging 67 months, which means buyers are still committing to long repayment periods—just with less favorable financing.

Notably, far fewer used-car shoppers are taking on loans at all. Only about 35 percent financed their purchase this year, according to Experian. That suggests more buyers are paying cash, making large down payments, or opting out of the market altogether as affordability erodes.

The long road to $750 a month

The climb to today’s payments didn’t happen overnight. Federal Reserve data shows a steady increase in the average amount financed on new vehicles from 2009 through 2019. That trend exploded during the pandemic, when supply shortages and pent-up demand sent prices soaring in 2020 through 2022.

By 2022, average monthly payments had already crossed $700. While inventory has improved since then, prices never meaningfully retreated. Instead, they flattened out at a new, higher baseline—one that has carried payments to record highs in 2025.

Final thoughts

For consumers, the takeaway is hard to ignore: affordability has fundamentally changed. A $750 monthly payment is no longer reserved for luxury brands or fully loaded trucks. It’s increasingly the cost of entry for an average new car.

Longer loan terms may soften the monthly hit, but they come with trade-offs, including higher interest costs and more time spent owing more than the car is worth. Unless prices or interest rates fall significantly, these payments may be here to stay—forcing buyers to choose between used cars with high rates, extended loans, or simply holding onto their current vehicles a lot longer.

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