Key takeaways
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Monthly car payments continue to hit record levels for both new and used cars.
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Auto loan interest rates have decreased and reached their lowest levels since 2023.
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The overall cost of car ownership remains elevated due to steep insurance and car maintenance prices in addition to the cost of a loan.
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Good credit scores are key to qualifying for the best auto loan rates and driving away with a competitive monthly payment.
New car prices remain steep, with monthly payments for new cars soaring to the highest levels ever recorded. Amid this environment, buyers are taking on increasingly larger loans to make vehicle purchases, and some are also stretching repayment over a longer timeline — in some cases, up to seven years.
Whether you have poor credit or are looking to refinance your current loan, it’s important to understand typical monthly payments and rates so you can feel confident that you are getting the best deal. While auto loan rates in 2026 are projected to lower slightly, it won’t be enough to put a serious dent in the many factors that are driving up the cost of car ownership, including continued high cost of auto insurance and maintenance expenses.
Car payment statistics
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The average monthly car payment for a new car reached $770 in the first quarter of 2026, while used cars had a slightly lower average of $531, according to data from Experian.
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New car payments over $1,000 now make up 18.96% of all new car loans and 8.71% of new car leases.
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This increase in monthly payment is due in part to the high cost of cars, with loan amounts for new cars averaging $43,925 at the beginning of 2026, up from $42,582 at the end of 2025.
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Banks are the most common choice for financing new and used auto loans (28.42%), but captive finance companies (26.83%) and credit unions (20.09%) follow closely behind.
What is the average monthly car payment?
The average monthly payment for new cars sat between $700 and $800 in the first quarter of 2026, according to Experian. Used cars had a smaller range, from around $500 to a little over $550.
Source: Experian State of Automotive Finance Market, Q1 2026
Although the current average monthly payment for a new and used car is $770 and $531, respectively, car payments are based on more than just the cost of the vehicle. You can calculate your car payment based on the amount you borrow, your annual percentage rate (APR) and loan term.
Average auto loan rates
Auto loan rates have a direct impact on the cost of your monthly car payment: If you qualify for a lower rate, your monthly car payment is less and conversely, higher rates drive up the amount of your monthly payment.
Source: Experian State of Automotive Finance Market, Q1 2026
Finding a lower rate by shopping with multiple lenders can be a more cost-effective way to lower your monthly payment. However, that can be challenging if you have poor credit or minimal credit history. Comparing bad credit auto loan lenders may help you secure a more competitive rate.
Average auto loan amounts
Average loan amounts don’t quite correlate with car prices because of down payments, people need to borrow less than the total cost of the vehicle. However, they have still seen a steady increase since 2022, which is driven, in part, by increased vehicle prices and the implementation of tariffs in 2025.
Source: Experian State of Automotive Finance Market, Q1 2026
Average auto loan terms
Auto loans are typically available in 12-month increments from 24 to 96 months. The most common terms are 60 and 72 months, but 84-month terms are becoming more popular as vehicle prices increase.
Source: Experian State of Automotive Finance Market, Q1 2026
Budgeting for car payments
Figuring out your budget for an auto loan can be tricky. It’s tempting to think in terms of monthly payments, but low payments often require longer terms, which increase the overall cost of your vehicle.
And remember, your vehicle will be losing value while you’re making those payments. Depreciation leads to a loss of up to 60%, according to Kelley Blue Book. The longer you continue to make payments on a car, the more likely you are to become underwater or upside-down on your car loan.
Instead of monthly payments, determine the total amount you want to spend on a car — including expected insurance costs, maintenance and repairs. If you know how much you are able to spend, you can select a loan that fits your budget rather than letting a payment set your budget for you.
Compare rates: Shop for the best auto loan rates to see your potential loan costs
How to calculate how much your car costs
Calculating your car’s cost gives you a better sense of the monthly payment you can afford. To determine how much your vehicle will truly cost, you must make some estimates.
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Use Edmunds’ car maintenance calculator to factor in the average cost based on your vehicle.
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Add the cost of car insurance. Some vehicles may have higher insurance premiums based on factors like safety features and repair costs.
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Calculate your estimated fuel costs using your car’s average miles per gallon, your estimated monthly mileage, and the average fuel costs in your area.
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Factor in the registration fees and taxes you’ll have to pay, along with the vehicle depreciation.
Reduce your monthly payments — and total purchase cost — by making a down payment. According to data from Edmunds, drivers put down on average $5,815 for new cars and $4,016 for used cars in the second quarter of 2026. If you have a trade-in, that would also count toward your down payment.
Bottom line
Although auto loan rates are affected by many factors beyond your control, smart choices can put you in the driver’s seat when it comes to this big purchase. Current interest rates will make monthly payments more expensive, so be patient. Take the time to compare different rates and build your credit score to qualify for better auto loan rates.