A lot of us grew up in a world where a car payment that could rival a mortgage was the domain of luxury-car buying. These days, the gap in finance costs between the two appears to be shrinking rapidly for everybody. At the end of Q3, the average monthly new-car loan payment in the United States ticked up to $748. Says who? Some random finance company you’ve never heard of? Ah, no. This time, it’s from Experian—the folks who can see your credit reports. I’m going to go out on a limb here and say their data on this sort of thing is probably pretty good.
These days, a loan is pretty much the way people buy cars. 80% of new-car purchases are financed, Experian says, along with about 35% of used-car purchases. The average new-car loan (which is usually, but not always, lower than the actual purchase price) is now north of $42,000, while the typical used-car principal is now just a smidge over $27,000—not typical buy-here, pay-here numbers, in other words.
While these financing terms may seem incomprehensible to older shoppers, the marketplace has shifted dramatically in recent decades. It’s no secret that cheap cars are borderline extinct. The average new car costs about $50,000 in the waning days of 2025, but even with inflation cooling elsewhere in the economy, tariff pressures and expiring electrification credits are pushing car prices in the other direction.
To keep financing affordable in the face of rising costs, banks have leaned into longer loan terms. The average for a new car is now nearly 70 months (just under six years), suggesting that 72-month loans have effectively become the default. Used-car loan terms are only two months shorter on average.
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