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Average auto loan payments: What to expect in 2023 Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by providing you with interactive financial calculators and tools that provide objective and original content. This allows you to conduct research and analyze data for free – so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that are advertised on this site are from companies that compensate us. This compensation can affect the way and when products are featured on this website, for example for instance, the order in which they appear within the listing categories in the event that they are not permitted by law. Our loan products, such as mortgages and home equity and other products for home loans. But this compensation does affect the information we provide, or the reviews you read on this site. We do not contain the entire universe of businesses or financial deals that might be available to you. Image Source/Getty Images

4 minutes read Read Published 7 March 2023.

Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the details of borrowing money to buy a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers feel confident to take control of their finances with precise, well-studied information that breaks down complicated subjects into digestible pieces. The Bankrate promises

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They ensure that what we write will ensure that our content is reliable, honest and trustworthy. The loans reporter and editor are focused on the areas that consumers are concerned about most — various types of loans available as well as the most favorable rates, the top lenders, the best ways to pay off debt and more — so you’ll be able to feel secure when investing your money. Integrity of the editing

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You have money questions. Bankrate can help. Our experts have helped you understand your money for over four decades. We continually strive to give our customers the right guidance and tools required to succeed throughout life’s financial journey. Bankrate adheres to strict standards policy, which means you can be confident that our information is trustworthy and precise. Our award-winning editors and reporters provide honest and trustworthy content to help you make the right financial choices. The content created by our editorial team is objective, factual and is not influenced from our advertising. We’re open regarding how we’re capable of bringing high-quality content, competitive rates and useful tools to our customers by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and services, or through you clicking certain links posted on our site. So, this compensation can impact how, where and when products are listed, except where prohibited by law for our mortgage or home equity products, as well as other home lending products. Other elements, like our own rules for our website and whether or not a product is available in your region or within your own personal credit score could also affect how and when products are featured on this site. While we strive to provide a wide range offers, Bankrate does not include information about each credit or financial item or product. For many Americans the expense of can be one of the most significant expenses to their wallets each month. This is not just the cost of housing. In the average, motorists spend more than $700 and $500 monthly for used and brand new cars and trucks, respectively, as per Experian’s fourth quarter report . Insurance costs an average of $2,014 annually according to . The high monthly cost is in addition to the increase everywhere from the supermarket to the mall. So while the cost you pay to keep your vehicle on the road is contingent on many factors including how good your credit is, what type of vehicle you select and the loan term — ongoing problems with supply and can increase the cost. Therefore, whether you’ve got or are looking to your current loan, it’s important to understand typical monthly payments and rates, so that you can be sure you’re receiving the best price. Car payment statistics The median monthly car payment for new cars is $716. The average monthly car payment for used cars is $526. 39.5 percent of the vehicles that were purchased in the quarter ending in the fourth quarter 2022, were brand new vehicles. 60.5 of percent of vehicles financed in the fourth quarter of 2022 were brand new vehicles. Of consumers purchasing new vehicles in 2022, 80.9 were able to fund their car, compared to 85.3 percent for 2021. The financing provided by credit unions accounted for nearly 30 percent of all auto loans during the same period. The average cost for car insurance is about $168 per month. New loan amounts are up 4.04 per cent in the quarter ending in. The popularity of wagons and SUVs boosted their share of financing, which reached 60.7 percent during the 4th quarter in 2022. All-in loan balances increased 8.56 percent during the same period.

What is the cost of an amount for a down payment on a car? One option to cut down on the more expensive than usual vehicle expenses that result in costly monthly payments is to deposit a . Down payment refers to the cash that you have on hand or any value you get from your car trade-in or rebates. It can save you money before financing begins and improve your standing with lenders. At least 20 percent of the cost of a brand new car and 10 if purchasing a used vehicle. In the fourth quarter of 2022, the average price for a new car was $6,780 new cars and $3,921 on used vehicles as per . Those buying new vehicles paid 30 percent more than in early 2021. How much will my car loan be? The average monthly car payment is dependent on more than the cost of the car. Your is based on how much you are financing the car in order to pay the principal amount of the loan as well as your rates of interest and loan term. Average

New automobiles

Cars that are used

Monthly payment

$716

$526

The amount of the loan

$41,445

$27,786

Rate of interest

6.07%

10.26%

Loan term

69.44 months

68.01 months

Monthly car payments, up to the point that the movement to collect alternative data catch up, serves as your financial DNA, and provides lenders an indication of how risky it could be to accept. If you have a good credit history, you are likely to get offered more competitive rates. In general, higher rates translate to lower monthly installments. Credit score

New cars

Used cars

Source: Experian State of Automotive Finance Market fourth quarter 2022

781 to 850 (super prime)

$683

$505

661-780 (prime)

$723

$519

601-660 (nonprime)

$753

$541

From 501 to 600 (subprime)

$746

$542

300-500 (deep subprime)

$700

$524

Average auto loan amount in the last year, the cost of vehicles has increased every month. The month of January, 2023 saw used cars cost on average $27,633 and new vehicles, $49,388 — from a year ago. The price increases indicate that motorists were taking out more cash to finance their cars. Credit score

New cars

Cars used

Source: Experian State of Automotive Finance Market fourth quarter 2022

781-850 (super prime)

$37,783

$28,183

661-780 (prime)

$43,001

$29,405

601-660 (nonprime)

$44,140

$27,719

Between 501 and 600 (subprime)

$40,737

$23,636

300-500 (deep subprime)

$35,234

$20,325

The average auto loan rates The most effective way of finding the best rate available is to research several lenders. Look into online lenders as well as more traditional options for banking before taking the final decision. Credit score

New cars

Used cars

Source Experian State of Automotive Finance Market third quarter 2022

781-850 (super prime)

4.75%

5.99%

661 to 780 (prime)

5.82%

7.83%

601-660 (nonprime)

8.12%

12.08%

501 to 600 (subprime)

10.79%

17.46%

300-500 (deep subprime)

13.42%

20.62%

Average auto loan conditions Most auto loans are available in 12-month increments. The most common term is between 24 and 60 months, however 72or terms of 84 months are becoming more frequent. There isn’t a best term and it is instead specific to your budget and requirements. A means lower monthly payments, but a higher cost over the long run. Credit score

New automobiles

Used cars

Source: Experian State of Automotive Finance Market fourth quarter 2022

781 to 850 (super prime)

63.81

65.34

661 – 780 (prime)

70.99

69.04

601-660 (nonprime)

74.48

69.03

501 to 600 (subprime)

74.02

66.58

300-500 (deep subprime)

73.01

62.95

How to determine how much your car costs In addition to the monthly payment take into account any additional costs. They include typical expenses like gas, insurance and maintenance. However, you must also set aside money for unforeseen accidents — at minimum, enough to cover your deductible. To calculate this number ahead of signing off on the purchase of a new car you’ll need to come up with estimates. Beginning with maintenance on your vehicle, use Edmunds’s to factor an average cost for your car. After that, add the number to your insurance premiums. While not every state has a requirement for it, the average motorist is expected to shell out about $168 per month. From there, add the estimated cost of fuel. Use your car’s average miles per gallon as well as your estimated monthly mileage , along with the average cost of fuel in your region to arrive at this number. Finally, factor in the registration, fees and taxes you’ll be required to pay, as well as the . The bottom line: Although rates for car financing depend on a myriad of factors outside of your control There are still options you can choose to put you in control in this big purchase. Make sure you compare various rates and boost your credit score in order to qualify for better rates. This is particularly important since consumers will face higher costs all over the board in the next year. The current interest rates are likely to increase the cost of monthly payments be patient and consider how to cut costs in the .

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the details of borrowing money to buy cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to manage their finances with concise, well-researched, and clear facts that break down otherwise complicated topics into digestible pieces.

Auto loans editor

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