The financial landscape for car buyers has become increasingly challenging, with monthly vehicle payments reaching new peaks. This trend is a direct consequence of escalating car prices, a phenomenon that intensified during the pandemic and shows no signs of abatement.
Navigating the Rising Costs of Vehicle Ownership
Soaring Costs: The New Reality for Car Buyers
The cost of purchasing a vehicle has seen a dramatic increase, a trend exacerbated by the global pandemic. Both brand-new and pre-owned automobiles are demanding historically high prices, a situation that appears to be the new norm for the foreseeable future.
New Car Payments Climb to Record Highs
An analysis by Experian for the third quarter of 2025 indicates that the average monthly payment for a new vehicle has reached $748. Although this figure represents a slight decrease of $1 from the previous quarter, it marks a $12 increase compared to the same period in 2024, with the typical loan amount standing at $42,332.
Credit Scores and Payment Disparities: Who Pays More?
While the overall average is high, individual payments vary based on creditworthiness. Borrowers categorized as "near-prime," with credit scores ranging from 601 to 660, face the highest average monthly payments at $793. In contrast, "super prime" borrowers (scores 781-850) enjoy the lowest payments at $727, closely followed by "deep subprime" buyers (scores 300-500) who also pay around $748 monthly.
Interest Rates and Loan Amounts: A Deeper Dive
Deep subprime borrowers not only incur the highest interest rates, averaging 15.85%, but also typically secure the smallest new car loans, averaging $35,286. Conversely, near-prime borrowers tend to finance the largest amounts for new vehicles, with an average loan of $44,526.
| Credit Score Range | Average New Monthly Car Payment | Average New Auto Loan Interest Rate | Average New Auto Loan Amount | Average New Loan Terms (Months) |
| Super Prime (781-850) | $727 | 4.88% | $40,534 | 64.80 |
| Prime (661-780) | $754 | 6.51% | $44,480 | 72.21 |
| New Prime (601-660) | $793 | 9.77% | $44,526 | 75.03 |
| Subprime (501-600) | $780 | 13.34% | $39,841 | 74.30 |
| Deep Subprime (300-500) | $748 | 15.85% | $35,286 | 72.66 |
Used Car Market: Elevated Prices and Payments Persist
The market for pre-owned vehicles has mirrored the new car segment, with prices continuing to rise in recent years. This has resulted in average monthly payments of $532 for a $27,128 loan in the last quarter. Similar to new car purchases, several factors influence the payment amount for individual buyers.
The Impact on Used Car Buyers: Deep Subprime at a Disadvantage
For used cars, deep subprime buyers face an average monthly payment of $556, which is $29 higher than the $527 paid by super prime buyers. Over a year, this translates to an additional $348. These buyers also contend with the highest interest rates, at 21.60%, for an average loan of $21,149.
Strategic Financing: A Key to Affordable Car Ownership
The current market makes both car acquisition and financing a complex endeavor. A borrower's credit score significantly impacts not only the type of vehicle they can afford but also their monthly financial commitment. It is highly recommended to explore financing options thoroughly before beginning the search for a new or used vehicle to ensure a sound financial decision.
