The wild swings in car pricing triggered during the pandemic years may have settled by 2025, but buyers are still living with the consequences. According to new data from Experian, average monthly car payments in the United States remain near record highs, reshaping what “affordable” means for millions of drivers.
While prices are no longer jumping quarter after quarter, they also aren’t coming down in any meaningful way. Instead, elevated vehicle prices, longer loan terms, and higher interest rates have combined to lock in monthly payments that would have seemed extreme just a decade ago.
New Car Payments Hold Near Record Levels
Data through the third quarter of 2025 shows the average monthly payment for a new vehicle has climbed to $748. That figure is tied to an average transaction price of $42,332 and an average interest rate of 6.56 percent.
Loan terms are stretching longer as well. The typical new car loan now runs about 69 months, and financing has become the default choice for buyers. Nearly 81 percent of new vehicles purchased this year were financed, underscoring how few consumers are paying cash at today’s prices.
What’s notable is stability at a high level. Since the end of the second quarter, average new car payments have hovered around $740, suggesting the market has found a plateau rather than a reversal.
Used Cars Offer Relief, But at a Cost
Used vehicles continue to offer lower monthly payments, but the gap is narrower than many buyers expect. The average used car payment now stands at $532 per month as of the third quarter.
That payment reflects an average used car transaction price of $27,128, paired with a steep average interest rate of 11.40 percent. While used car loans are slightly shorter, averaging about 67 months, the higher borrowing costs significantly reduce the savings advantage.
Interestingly, only about 35 percent of used car buyers financed their purchases this year. That lower financing rate suggests some consumers are opting for older or less expensive vehicles they can buy outright, rather than taking on high-interest debt.
How We Got Here
Today’s payment levels didn’t appear overnight. Federal Reserve Bank data shows a steady, almost linear rise in average amounts financed for new vehicles between 2009 and 2019. That trend accelerated sharply during the pandemic, when supply shortages and production disruptions pushed prices higher in 2020 through 2022.
By 2022, average new car payments crossed the $700 mark for the first time. Even as supply chains improved, prices never fully retreated. Instead, they continued climbing, reaching their highest levels yet in 2025.
What It Means for Buyers
For many households, car payments have become a long-term budget fixture rather than a temporary stretch. Longer loans may lower monthly bills slightly, but they also keep buyers in debt for years and increase total interest paid.
In 2025, the story isn’t about volatility anymore. It’s about acceptance. High monthly payments are no longer a shock. They’re simply the cost of getting behind the wheel in today’s auto market.
