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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 smarter financial decisions by offering you interactive tools and financial calculators that provide objective and original content. We also allow you to conduct research and compare information for free to help you make financial decisions with confidence. Bankrate has partnerships with issuers such as, 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 come from companies that pay us. This compensation may impact how and where products appear on the site, such as such things as the order in which they may appear in the listing categories and other categories, unless prohibited by law. This applies to our loans, mortgages,, and other products for home loans. However, this compensation will not influence the information we publish, or the reviews you see on this site. We do not cover the entire universe of businesses or financial offers that may be open to you. Image Source: Getty Images/Getty Images
4 min read Published on March 7, 2023.
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers to navigate the details of borrowing money to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers feel confident to manage their finances by providing clear, well-researched facts that break down complicated topics into bite-sized pieces. The Bankrate promise
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If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your money for over four years. We continually strive to provide consumers with the expert guidance and the tools necessary to make it through life's financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can be sure that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial choices. The content we create by our editorial team is objective, truthful and uninfluenced from our advertising. We're open about the ways we're in a position to provide quality information, competitive rates and helpful tools to our customers by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods and services or by you clicking on specific links on our site. This compensation could impact how, where and in what order items appear in listing categories, except where prohibited by law. This is the case for our mortgage, home equity and other products for home loans. Other factors, like our own website rules and whether a product is available in the area you reside in or is within your self-selected credit score range can also impact how and when products are featured on this website. Although we try to offer an array of offers, Bankrate does not include details about each credit or financial item or product. For many Americans, the cost to is one of the biggest hits on their pockets each month outside of housing costs. On average, motorists are spending more than $700 or $500 per month on used and new vehicles in the respective quarters, according to Experian's fourth-quarter . Insurance costs on average $2,014 per year as per . This steep monthly charge comes on top of increases everywhere from the grocery store to the shopping mall. Also, the amount you spend to keep your vehicle on the road is contingent on a number of factors that include your score on credit, to the type of vehicle you pick and your loan duration -- it is not a guarantee that will supply troubles and will increase the cost. Therefore, whether you've got or are considering taking out a current loan it is essential to be aware of typical monthly payments and rates to be confident that you're receiving the best price. Statistics on car payments The average monthly car payment for new automobiles is $716. The average monthly car payment for used cars is $526. 39.5 percent of the vehicles purchased in the 4th quarter of 2022 had brand new vehicles. 60.5 of percent of vehicles that were financed in the quarter that ended in 2022's fourth quarter were brand new vehicles. For those who bought new vehicles by 2022 80.9 were able to fund their vehicle, as opposed to 85.3 per cent for 2021. Credit union financing made up more than 30 percent of auto loans during the same period. The average cost for insurance for cars is approximately 168 dollars per month. The latest loan amounts are up 4.04 per cent in the quarter ending in. SUVs and wagons increased financing share, hitting 60.7 percent during the 4th quarter in 2022. All-in loan balances increased by 8.56 percent over the same time frame.
What is the price of a down payment for a car? One option to cut down on the higher-than-usual vehicle costs creating high monthly costs is to make the amount of . Down payment refers to money you have and any value that is derived from your vehicle trade-in or money from rebates. It will save you money before your financing even begins and improve your standing with lenders. At least 20 percent of an all-new vehicle and 10 if buying used. In the quarter that ended in the fourth quarter of, the average price for a new car was $6,780 new vehicles and $3,921 for second-hand ones, according to . New car buyers received 30 percent more in the beginning of 2021. How much will my car payment be? The average monthly car payment is dependent on more than the cost of the car. It is determined by how much you're financing the car in order to pay off the loan's principal, along with your rates of interest and loan duration. Average
New cars
Cars that are used
Monthly payment
$716
$526
The amount of the loan
$41,445
$27,786
Interest rate
6.07%
10.26%
The term "loan"
69.44 months
68.01 months
The average monthly payment for car loans, until the alternative data movement catches up, they serve as your financial DNA and provides lenders an idea of how risky you are to risk. If you've got strong credit history, you are likely to get offered higher rates that are competitive. And for most, better rates translate to lower monthly installments. Credit score
New cars
Used cars
Source: Experian State of Automotive Finance Market fourth quarter 2022
781-850 (super prime)
$683
$505
661-780 (prime)
$723
$519
601 to 660 (nonprime)
$753
$541
Between 501 and 600 (subprime)
$746
$542
300 to 500 (deep subprime)
$700
$524
Average car loan amount over the last year vehicle prices have increased each month. In January 2023, used vehicles were priced at an average of $27,633 compared to new cars, $49,388 -up from one year ago. The higher prices indicate that motorists were taking out more money to finance their cars. Credit score
New cars
Cars that are used
Source Experian State of Automotive Finance Market fourth quarter 2022
781 to 850 (super prime)
$37,783
$28,183
661-780 (prime)
$43,001
$29,405
601 to 660 (nonprime)
$44,140
$27,719
Between 501 and 600 (subprime)
$40,737
$23,636
300-500 (deep subprime)
$35,234
$20,325
Auto loan rates The key to finding the best rate available is to compare various lenders. Explore lenders online and other traditional options in banking prior to making a decision. Credit score
New cars
Cars that are used
Source Experian State of Automotive Finance Market third quarter 2022
781 to 850 (super prime)
4.75%
5.99%
661-780 (prime)
5.82%
7.83%
601-660 (nonprime)
8.12%
12.08%
From 501 to 600 (subprime)
10.79%
17.46%
300 to 500 (deep subprime)
13.42%
20.62%
Average auto loan terms Most auto loans are offered in increments of 12 months. The most commonly used terms are 24 to 60 months, however 72months and terms of 84 months are becoming more frequent. There isn't a perfect term, and each one is tailored to your needs and budget. A means lower monthly payments however, it will cost more overall. Credit score
New automobiles
Cars that are used
Source: Experian State of Automotive Finance Market fourth quarter 2022
781-850 (super prime)
63.81
65.34
661-780 (prime)
70.99
69.04
601-660 (nonprime)
74.48
69.03
Between 501 and 600 (subprime)
74.02
66.58
300-500 (deep subprime)
73.01
62.95
How do you determine how much your car will cost you In addition to the monthly payment be sure to factor in additional expenses. They include typical expenses like gas, insurance and maintenance. However, you must also set aside funds for unforeseeable accidents -- at least enough to pay your deductible. To figure out this amount prior to of signing a contract for a new vehicle it is necessary to make some estimates. Starting with car maintenance using Edmunds's method to calculate the an average cost for the vehicle you own. Next, add that number to the expected insurance cost. Although not all states require it, the average motorist is expected to shell out about $168 per month. From there, add the estimated cost of fuel. Take your car's average miles per gallon, and the estimated monthly mileage along with the average cost of fuel in your area to get this figure. Also, consider the cost of registration, fees and taxes you'll need to pay, along with the . The bottom line is that even though the available rates for car financing are influenced by a variety of factors outside of your control, there still are options you can choose that put you in the driver's seat when it comes to the purchase of a car. Make sure you compare various rates and increase your credit score to qualify for better rates. This is especially important as consumers will be faced with higher costs all over the board during the next year. The current interest rates are likely to make monthly payments more expensive, so 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 specializes in assisting readers to navigate the ins and outs of securely taking out loans to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to take control of their finances through providing precise, well-researched and well-written facts that break down complex subjects into bite-sized pieces.
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