Average car loan payments: What to expect

For many Americans, the cost of financing a vehicle can be one of the biggest blows to their wallet each month in addition to the cost of housing. The amount you have to pay to keep your car on the road depends on several factors ranging from current power supply problemsyour credit score, the vehicle you choose and the duration of your loan.

As an informed consumer and guide, it is important to understand the standard monthly payments and charges so that you feel confident that you are getting the best deal.

Basic statistics of monthly car payments

  • The average monthly car payment for new cars are $ 609.
  • The average monthly car payment for used cars are $ 465.
  • 59.27 percent of the consumers funded used vehicles in the third quarter of 2021.
  • 40.73 percent of the consumers funded new vehicles in the third quarter of 2021.
  • SUVs are over 56 percent all new loans.

How much are monthly car payments?

Average monthly car payments are based on more than just the cost of the vehicle. The expected monthly cost is based on the amount you borrow to finance this vehicle in order to repay the loan capital, along with the interest rate and duration of the loan.

Average New cars Used cars
Monthly payment $ 609 $ 465
Loan amount $ 37,280 $ 25,909
Interest rate 4.05% 7.98%
Loan duration 69.47 months 66.71 months

Source: Experian State of Automotive Finance Market 3rd quarter 2021

Average monthly car payments

Until alternative data traffic arrives, your credit score serves as your financial DNA and gives lenders an idea of ​​how risky you can be to take on. If you have a strong credit history, you are likely to be offered more competitive prices. And for most, better prices mean lower monthly payments.

Credit rating New cars Used cars
781–850 $ 579 $ 439
661–780 $ 616 $ 457
601–660 $ 642 $ 483
501–600 $ 631 $ 486
300–500 $ 587 $ 476
Average $ 611 $ 468

Source: Experian State of Automotive Finance Market 3rd quarter 2021

Average car loan amount

Last year, the loan amount for new and used vehicles increased on an annual basis by 8.55 percent and 20.92 percent, respectively. This means that drivers made more money to finance their vehicles.

Credit rating New cars Used cars
781–850 $ 33,915 $ 25,965
661–780 $ 38,896 $ 27,428
601–660 $ 39,310 $ 26,095
501–600 $ 35,092 $ 21,779
300–500 $ 29,952 $ 18,319
Average $ 35,433 $ 23,917

Source: Experian State of Automotive Finance Market 3rd quarter 2021

Average car loan interest rates

The key to finding the best available price is to shop with different lenders. Check out online lenders along with more traditional banking options before signing up for a loan.

Credit rating New cars Used cars
781–850 2.58% 3.68%
661–780 3.64% 5.35%
601–660 6.32% 9.77%
501–600 9.92% 15.91%
300–500 12.99% 19.85%
Average 7.09% 10.91%

Source: Experian State of Automotive Finance Market 3rd quarter 2021

Average car loan

Most car loans are available in 12 month increments. The most common terms are 24, 36, 48, 60, 72 and 84 months. There is no perfect term and instead it is specific to your budget and needs. A longer term means lower monthly payments, but higher costs overall.

Credit rating New cars Used cars
781–850 63.94 64.25
661–780 70.97 67.75
601–660 74,13 67.77
501–600 73.5 64.99
300–500 72,19 60.87
Average 70.94 65,13

Source: Experian State of Automotive Finance Market 3rd quarter 2021

How to calculate how much your car costs

Once you understand how much money will come out of your wallet each month to finance your car, you should also consider the additional cost of the vehicle that is expected to arise. This can include filling at the gas station, unforeseen accidents, insurance, vehicle maintenance and the depreciation that results when you drive from the batch.

To calculate this number before disembarking in a new vehicle, you need to make some estimates.

  1. Starting with vehicle maintenance, use Edmunds car maintenance computer to calculate the average cost based on your vehicle.
  2. Then add this number to expected insurance costs. Although not every state requires it, the average driver should be prepared to pay around $ 140 a month.
  3. From there, add the estimated fuel costs. Use your car’s average MPG and estimated monthly mileage along with the average fuel cost in your area to get this number.
  4. Finally, consider the registration, fees and taxes you will have to pay, along with the vehicle damping.

The bottom line

Although the vehicle financing rates available are influenced by many factors beyond your control, there are still choices you can make to put yourself in the driver’s seat when it comes to this big market. Take time to compare different percentages and button up your credit score so you can qualify for more competitive prices. And as the pandemic continues shape the car buying processyou will have new trends to pursue and even more opportunities for online shopping.

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