The typical American spends $748 each month to finance a new vehicle.

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      Many of us grew up in an era where car payments rivaled mortgage payments, a situation typically reserved for luxury vehicles. Nowadays, the disparity in financing costs between luxury and standard cars appears to be narrowing quickly. By the end of Q3, the average monthly new-car loan payment in the United States rose to $748. And who provides this information? Not some obscure finance company. It's Experian—the organization that has access to your credit reports. I’m inclined to trust their data on these matters.

      Currently, financing is the primary way consumers purchase cars. Experian reports that 80% of new-car acquisitions are financed, along with around 35% of used-car purchases. The average new-car loan (which is usually, but not always, lower than the actual sale price) has exceeded $42,000, while the typical amount for a used car is slightly over $27,000—not exactly typical buy-here, pay-here figures.

      Although these financing conditions may seem bewildering to older buyers, the market has transformed significantly over the years. It’s widely known that affordable cars are almost extinct. The average new car is priced around $50,000 by the end of 2025, but despite inflation stabilizing elsewhere, tariffs and the expiration of electrification credits are driving automotive prices even higher.

      To maintain manageable financing amidst rising costs, banks are increasingly offering longer loan terms. The typical duration for a new car loan is now close to 70 months (just shy of six years), indicating that 72-month loans have essentially become the norm. Used-car loan terms average just two months shorter.

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