Average Car Payment Hits All-Time High as Loan Terms Near 6 Years

Monthly-Payments-2.jpg illustration by Paul Dolan; Gal_Istvan/iStock

The average monthly loan payment taken on by new-car buyers hit a record $523 in the first quarter of 2018, up $15, or about 3 percent, from a year ago, according to credit tracker Experian. About 85 percent of new cars are bought with financing, and the increase in the average payment tracks with increased sales of more expensive SUVs and also an uptick in new-car loan rates.

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The average loan amount for a new car in the first quarter was $31,455, up $921 from a year ago. Meanwhile, the average interest rate was 5.17 percent, up nearly one-third of a point.

Buyers also are making those higher payments for a long time, even though longer loans were not enough to keep the average payment from rising. The average loan term in the first quarter edged closer to six years, increasing to 69.03 months. And three-quarters of new-car loans were 61 months or longer.

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New-car leasing continues to be an attractive alternative for getting a lower monthly payment. The percent of all new vehicles that are leased declined slightly from a year ago but remains at nearly 30 percent, and is used by more than a third of buyers with higher credit scores. The average lease payment was $436 in the first quarter, up $26, or about 6 percent, from a year ago.

The average loan payment for used cars also rose in the first quarter, but more moderately than for new cars. The average payment was $372, up $9 or about 2 percent. The average loan length was not far behind new cars, however, at 64.23 months, and the average loan rate for used cars was 9.18 percent.

Other highlights from Experian’s State of the Automotive Finance Market Q1 2018 report:

  • While buyers are borrowing more, rates of loan and lease delinquencies seemed to be stabilizing after recent increases. Loans and leases 60 days past due held steady from a year ago at 0.66 percent, while those 30 days past due declined slightly to 1.9 percent.
  • Lenders wrote more loans and leases for buyers with better credit. The shares for subprime and deep subprime buyers (credit scores of 300 to 500) declined, while they increased for prime and super prime buyers (credit scores of 661 to 850).
  • Credit unions increased their share of overall auto lending and leasing from a year ago to 21.3 percent, behind banks at 31.6 percent and automakers’ finance units at 29 percent.’s Editorial department is your source for automotive news and reviews. In line with’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of’s advertising, sales and sponsored content departments.

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