Average Car Loan Payments: What to Expect – Bankrate.com | Car Plazas
For many Americans, the cost of financing a vehicle can be one of the biggest hits on their wallets alongside housing costs. The amount you have to pay to keep your car on the road depends on a number of factors, including supply issues, your credit history, the vehicle you choose, and your loan term.
As an informed consumer and driver, it’s important to understand typical monthly payments and installments so you can be confident you’re getting the best deal.
Important monthly car payment statistics
- The average monthly car payment for new cars is $648.
- The average monthly car payment for used cars is $503.
- 41.02 percent by consumers new car financed in the first quarter of 2022.
- 58.98 percent by consumers financed used cars in the first quarter of 2022.
- make SUVs over 60 percent all new loans.
What are the monthly car rates?
Average monthly car payments are based on more than just the cost of the vehicle. Your expected monthly cost is based on how much you borrow to finance that vehicle to pay back the loan amount, along with your interest rate and loan term.
| Average | new cars | used cars |
|---|---|---|
| Monthly payment | $648 | $503 |
| loan amount | $39,540 | $27,945 |
| interest rate | 4.07% | 8.62% |
| credit term | 69.48 months | 67.65 months |
Source: Experian State of Automotive Finance Market Q1 2022
Average monthly car payments
Until the alternative data movement catches up, your creditworthiness serves as your financial DNA and gives lenders an idea of how risky you might be. If you have a strong credit history, you will likely be offered more competitive rates. And for most, better plans mean lower monthly payments.
| credit-worthiness | new cars | used cars |
|---|---|---|
| 781-850 | $548 | $405 |
| 661-780 | $588 | $407 |
| 601-660 | $604 | $424 |
| 501-600 | $584 | $427 |
| 300-500 | $522 | $425 |
| Average | $648 | $503 |
Source: Experian State of Automotive Finance Market Q1 2022
Average car loan amount
Last year, loan amounts for new and used vehicles increased 11.74 percent and 24.89 percent, respectively, year-on-year. That means motorists are withdrawing more money to fund their vehicles.
| credit-worthiness | new cars | used cars |
|---|---|---|
| 781-850 | $32,615 | $23,580 |
| 661-780 | $37,433 | $24,026 |
| 601-660 | $36,874 | $22,298 |
| 501-600 | $31,847 | $18,246 |
| 300-500 | $26,914 | $15,699 |
| Average | $39,540 | $27,945 |
Source: Experian State of Automotive Finance Market Q1 2022
Average car loan rates
The key to finding the best interest rate available is to look around at different lenders. Research online lenders and more traditional banking options before taking out a loan.
| credit-worthiness | new cars | used cars |
|---|---|---|
| 781-850 | 2.40% | 3.71% |
| 661-780 | 3.56% | 5.58% |
| 601-660 | 6.70% | 10.48% |
| 501-600 | 10.87% | 17.29% |
| 300-500 | 14.76% | 20.99% |
| Average | 7.67% | 11.61% |
Source: Experian State of Automotive Finance Market Q1 2022
Average car loan conditions
Most car loans are available in 12-month increments. The most common terms are 24 to 60 months, but maturities of 72 and 84 months are becoming more common. There is no perfect Expression, and it’s instead specific to your budget and needs. A longer term means lower monthly payments but higher overall costs.
| credit-worthiness | new cars | used cars |
|---|---|---|
| 781-850 | 64.33 | 63.28 |
| 661-780 | 71.18 | 66.95 |
| 601-660 | 74.17 | 67.00 |
| 501-600 | 73.36 | 64.12 |
| 300-500 | 71.99 | 60.44 |
| Average | 69.48 | 67.65 |
Source: Experian State of Automotive Finance Market Q1 2022
How to calculate how much your car costs
In addition to the monthly payment, consider other costs. This includes general expenses such as gas, insurance and maintenance. But you should also put money aside for unforeseen accidents – at least enough to cover your deductible.
In order to calculate this figure before deregistering a new vehicle, you need to make some guesses.
- Starting with vehicle maintenance, use Edmunds car maintenance calculator to consider the average cost based on your vehicle.
- Next add this number anticipated insurance costs. While not every state requires it, the average driver should be prepared to pay around $140 a month.
- From there, add your estimated fuel costs. Use your car’s average miles per gallon and your estimated monthly mileage along with the average cost of fuel in your area to get this number.
- Finally, consider the registration, fees, and taxes you will need to pay along with the vehicle depreciation.
The final result
Although the vehicle financing rates available are affected by many factors beyond your control, you can still make decisions to get behind the wheel of that big purchase.
Take your time Compare different tariffs and improve your credit score so you can qualify for more competitive rates. And as the pandemic continues shape the car buying processhave new trends to keep up with and even more online shopping opportunities.