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The average monthly car payment in the United States soared to an all-time high in Q1 according to Experian. Unsurprisingly, the average amount borrowed on cars, trucks, and SUVs has also reached a new all-time high.
I’m genuinely curious where all of these massive monthly car payments are coming from. I polled my a few friends and none of them are paying this much. Are Baby Boomers just paying out the ass right now for entry-level BMWs or used Cadillac Escalades? This new report about the astronomically high average monthly car payments in the US comes from CNBC:
In the first quarter of this year, the average monthly loan payment for a new vehicle climbed $15 compared with last year, hitting an all-time high of $523, according to Experian. The credit analysis company’s review of new and open auto loans for the first three months of this year found buyers of new cars, trucks and SUVs borrowed an average of $31,453 — also a record high.
Experian calculated payment and loan amounts after analyzing more than 4.7 million auto loans.
The increase in monthly payments for new vehicles is not surprising given the rise in interest rates. In the first quarter, the average interest rate for a new vehicle loan was 5.17 percent, up 31 basis points compared with a year ago, according to Experian. (via)
By the way, there are some pretty interesting reactions to/comments about this article over on Reddit’s Personal Finance subreddit where everyone and their brother seems to have a hot take on how much you should be spending each month on a car. So if you’re thinking of buying a new car anytime soon I’d suggest reading through those comments.
When I first came across these numbers I immediately had to pop open my phone and check what my monthly car payment is (about half the national average) because I was shocked. To be honest, I didn’t even know what my monthly payment was because I’ve been paying 1.5x more than the monthly minimum since I bought the car in an effort to pay it off sooner and cut down on the interest.