Summary
Experian’s latest snapshot shows the average monthly payment on a new-car loan in the United States reached $748 at the end of the third quarter of 2025, reflecting higher vehicle prices and widespread use of longer loan terms. Loans remain central to purchases, with financing costs shaping household budgets as balances and terms grow.
Longer terms are helping keep monthly payments within reach, but they also extend payback periods and can increase total interest paid. The trend underscores how today’s car buying often involves larger principals spread over nearly six years.
Key figures (Experian unless noted)
- Average new-car monthly payment: $748.
- Share financing purchases: about 80% of new-car buyers; about 35% of used-car buyers.
- Average amount financed: $42,000+ for new vehicles; just over $27,000 for used.
- Average term length: nearly 70 months for new; used terms are only about two months shorter.
- The Drive claims 72-month loans now dominate both new- and used-car financing.
- The Drive also reports the typical new vehicle sells for about $50,000 in late 2025.
Why payments are rising
- Higher vehicle prices lead to larger balances financed, lifting monthly payments even when terms are extended.
- Longer terms reduce the monthly bill but typically increase total interest paid over the life of the loan.
- The Drive claims tariff pressures and expiring electrification credits are pushing vehicle prices higher despite broader inflation cooling.
Loan terms and their effects
Nearly six-year average terms indicate that 72-month contracts have become commonplace. While this helps buyers clear monthly affordability hurdles, it also keeps them in debt longer on a depreciating asset and can extend the period of negative equity, complicating trade-ins and early payoffs.
Financing prevalence and amounts
With four out of five new-car buyers relying on loans, shifts in prices, interest rates, or lending standards ripple quickly through the market. The average new-vehicle principal above $42,000 and used-vehicle principal just over $27,000 indicate larger balances are now the norm, and used-car loan terms are only slightly shorter than new-car loans.
Affordability levers are limited
- Key levers: vehicle price, interest rate, loan term, and down payment/trade-in equity.
- When prices rise faster than rates fall or down payments grow, extending the term is the primary way to lower the monthly cost—contributing to today’s near six-year averages.
Outlook
The Drive highlights policy and market factors—such as tariffs and the status of electrification incentives—that could influence prices going forward. Experian’s forthcoming updates will show whether balances, terms, and the $748 average monthly payment continue to trend higher.
