American car buyers now face record-high monthly payments, as vehicle prices remain stubbornly elevated despite slight quarterly dips. A recent Experian report reveals the average new car loan payment hit $748 in the third quarter of 2025 – a 12% increase from the same time last year, even though loan amounts have risen as well.
The Rising Cost of Credit
The data breaks down sharply by credit score:
- Near-prime borrowers (601–660 credit) pay the most, averaging $793 per month.
- Super-prime borrowers (781–850 credit) enjoy the lowest payments at $727.
- Deep subprime borrowers (300–500 credit) face payments of $748, but with the highest interest rates.
Interest rates are the key driver of these disparities. Deep subprime borrowers, while securing smaller loans ($35,286), pay a staggering 15.85% interest rate. Near-prime buyers, with the largest new car loans ($44,526), still benefit from relatively lower rates.
Used Cars Are Not a Relief
The used car market offers little respite. Average monthly payments reached $532 on a $27,128 loan last quarter. Again, credit scores matter:
- Deep subprime used car buyers pay $556 per month with a 21.60% interest rate.
- Super-prime used car buyers pay $527, a $348 annual difference.
This gap highlights the growing financial burden for those with poor credit. While high rates are the norm, they make vehicle ownership increasingly unattainable for many consumers.
What This Means for Buyers
The auto loan market is unforgiving. Creditworthiness dictates not only your monthly payment but also the vehicle you can afford. Smart buyers should pre-shop for financing before committing to a car purchase. This allows them to compare rates, negotiate terms, and avoid being locked into unfavorable deals.
The trend is clear: vehicle financing is getting harder, and consumers are paying more than ever.
