America’s families now face average new car payments of $748 monthly—nearing $750—trapping them in debt traps that echo the fiscal recklessness of Biden-era inflation and overspending.
Story Snapshot
- Experian Q3 2025 data reveals new car payments at $748 on 69-month loans, up 1.8% year-over-year from pandemic-driven price hikes.
- Used car payments hit $532 at 11.4% rates, squeezing lower-income households hardest amid persistent high interest.
- 81% of new cars are financed, with terms stretching to mask true costs, risking negative equity as vehicles depreciate rapidly.
- Credit scores dictate burden: super-prime pay $727, subprime up to $793, highlighting lender leverage over buyers.
- President Trump’s economic revival offers hope, but families must scrutinize loans to avoid Biden-style debt burdens.
Rise in Car Payments Hits Record Levels
Experian data for Q3 2025 shows average new car payments reached $748, based on $42,332 transaction prices, 6.56% interest rates, and 69-month terms. This marks a 1.8% increase from Q3 2024’s $735. Used car payments averaged $532 on $27,128 prices at 11.4% rates over 67 months, up 1.5% year-over-year. Leases climbed to $596, a 1.9% rise. These figures reflect 81% financing for new vehicles versus 35% for used, as households stretch budgets in a high-rate environment tied to past Federal Reserve policies.
Historical Climb Fueled by Pandemic Disruptions
Payments rose steadily from $554 in Q4 2019 to $617 in Q3 2021, then surged to $700 by late 2022 amid global chip shortages and factory shutdowns that cut production and inflated prices 30-40%. Q3 2023 saw $726, Q4 2024 hit $742, and Q3 2025 stabilized at $748. Pre-2020 averages hovered at $500-550, but inflation and demand locked in higher baselines. This linear post-2009 trend accelerated under pandemic pressures, leaving families with elevated costs despite market normalization.
Credit Scores Drive Payment Disparities
Loan payments vary sharply by credit tier. Super-prime borrowers (781-850) pay $727 monthly for new cars and $527 for used. Prime (661-780) face $754 new and $519 used. Nonprime (601-660) owe $793 new and $543 used. Subprime (501-600) hit $780 new and $555 used, while deep subprime (300-500) pay $748 new and $556 used. Lenders exploit these gaps, bundling financing at dealerships. Automakers and banks profit from volume, even as buyers risk overextension on depreciating assets.
Extended terms like 69 months hide total costs, exposing owners to negative equity after 20-30% first-year depreciation. This burdens budgets equivalent to 10% of median income, curbing spending on essentials and inflating household debt. Lower-income families suffer most from used-car rates labeled “disgusting” at 11.4%.
Implications for Families and Economy
Short-term, $748 payments strain family finances, prioritizing vehicles over savings amid ballooning auto debt. Long-term, prolonged loans lock in mobility costs, hitting young families and nonprime borrowers hardest with delinquency risks. Economically, this curbs broader spending; socially, it limits opportunity in rural areas needing reliable transport. Politically, it underscores past fiscal mismanagement’s legacy. President Trump’s tax cuts and deregulation promise relief, urging shoppers to compare loans and prioritize cash buys to reclaim financial freedom.
Experts from Experian and LendingTree recommend using calculators and shopping rates, noting stabilization but warning longer terms mask expenses. Media consensus advises walking away if math fails, as credit dictates outcomes in this lender-driven market.
Sources:
The Average New Car Payment Has Reached Almost $750 a Month – Road & Track
Average New Car Payments Are Closing in on $750 a Month – Automotive Addicts
The Average New Car Payment Was Nearly $750 A Month In Q3 Of 2025 – Jalopnik
Auto Debt Statistics – LendingTree
