What is the average car payment?
The average car payment for a new vehicle is $742 monthly, according to Q4 2024 Experian data — down 0.1% year over year. Used cars have an average monthly payment of $525, down 1.9% over the same period. Meanwhile, new lease payments average $600, a 1.6% year-over-year decrease.
| Salary | Maximum monthly car payment (10%) | Maximum monthly car payment (15%) |
|---|---|---|
| $20,000 | $167 | $250 |
| $40,000 | $333 | $500 |
| $60,000 | $500 | $750 |
| $80,000 | $667 | $1,000 |
Calculator Results
A $30,000 auto loan balance with an average interest rate of 5.0% paid over a 5 year term will have a monthly payment of $566. In total, the loan will cost $33,968 with $3,968 in interest.
In today's market of inflated car prices and payments, the average monthly new-car payment has surpassed $700, according to the vehicle affordability index provided by analytics companies Cox Automotive and Moody's Analytics.
$350 is a decent payment even for 72 months. Main thing would be try to pay it off early if at all possible by paying extra or making double payments. Especially as your income grows. I did a $350 car payment after messing up with a $450 car payment and it definitely helped open up some breathing room in the budget.
A high car payment is a subjective term and can vary depending on a person's individual financial situation and priorities. Generally, however, a car payment is considered high if it exceeds 10-15% of a person's gross monthly income.
Q: How much is a car payment on a $35,000 car? A: Assuming a 3.5% APR and 60-month term, it would be about $545 monthly.
If your gross salary is $60,000, your take-home monthly pay is probably around $3750, assuming about 25 percent of your pay goes toward taxes and other expenses. Based on a calculation of spending 10–15 percent of your monthly pay on a car loan, you should spend no more than $562.50 on your monthly car payment.
How are credit scores used? The average credit score in the US is 715, according to a report from Experian. High interest rates and lingering inflation contribute to more missed payments and debt levels.
Better interest rate: A 60-month loan will typically have a lower interest rate than a 72-month loan because the risk for lenders isn't as high. (Lenders consider long-term loans to be riskier because the longer it takes to pay off the loan, the more opportunity exists for the loan to not be paid back in full.)
What is too high for a car loan?
A high interest rate on a car loan is one that's above the national average. In the second quarter of 2024, the average rate was 6.84% for new cars and 12.01% for used cars, according to Experian's State of the Automotive Finance Market report.
If you need lower monthly car payments or like to drive newer car models, leasing a car might appeal to you more. On the other hand, if you drive many miles or want to eventually have no car payment, buying a car could be your better option.
I'm a Financial Planner: Don't Spend More Than 15% of Your Income on a Car Payment.
The 50/30/20 budgeting guideline is a practical approach to managing your finances which suggests that you should allocate 50% of your income toward necessities including housing and utilities, 30% for spending on things like entertainment and hobbies, and 20% to savings and debt repayment.
A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.
There's no perfect formula for how much you can afford, but our short answer is that your new-car payment should be no more than 15% of your monthly take-home pay. If you're leasing or buying used, it should be no more than 10%.
Car payment statistics
Experian's quarterly State of the Automotive Finance Market report found that the average monthly car payment for new cars is $742, while used cars had a slightly lower payment of $525. 44.21 percent of vehicles financed in the fourth quarter of 2024 were new vehicles.
- Compare multiple loan offers. Financing your purchase through the dealership is easy, convenient, and quicker than shopping around for other offers, but it may not be your best bet. ...
- Buy a lower-priced vehicle. ...
- Improve your credit. ...
- Make a larger down payment. ...
- Extend your loan term.
With no more debts to pay off, you get to experience what your paycheck actually feels like without the burden of debt payments every month. As a result, you'll have a lot more money to save, spend, or invest going forward. At first, you may even feel rich!
- Make bi-weekly payments. ...
- Round up your monthly payment. ...
- Make one extra payment per year. ...
- Use extra money to make a payment. ...
- Refinance for a better rate. ...
- Check into discounts or optional add-ons.
What's a good APR for a car?
| Credit Score Range | New Car APR | Used Car APR |
|---|---|---|
| Super prime (781 or above) | 5.08% | 7.41% |
| Prime (661 - 780) | 6.70% | 9.63% |
| Near prime (601 - 660) | 9.73% | 14.07% |
| Subprime (501 - 600) | 13.00% | 18.95% |
What Are the Disadvantages of a Large Down Payment? Providing more money down doesn't guarantee a lower interest rate, and it can cut into your savings. Depending on the vehicle you choose to buy, 50% can be a lot of money to put down on an auto loan.
When you lease a car, your monthly rentals are usually lower than when you finance the car. You're not paying to purchase the vehicle, so your monthly outgoings are lower. Whereas in the case of financing, since you are slowly buying the car, your monthly installment is generally higher than that in leasing.
- Find the right car. Great negotiating starts before you talk numbers. ...
- Do your homework to determine a fair price. ...
- Choose your strategy. ...
- Negotiate more than just price. ...
- Carefully consider add-ons.
The 20/4/10 rule is a guideline that focuses on three things when you're buying a car. The rule suggests you put 20% down and have a maximum loan term of four years. Plus, you should maintain transportation costs each month that are no more than 10% of your gross monthly income.
