Here's the Average American's Car Payment. How Does Yours Compare?

We all know how high the price tags are on cars these days, but that's only a fraction of the total cost of ownership. There's gas, auto insurance premiums, and registration fees, to name a few. Many drivers also have to pay a monthly car payment, at least for a few years.

Auto loan debt rose to $1.626 trillion in the second quarter of 2024, with the average auto loan balance of just over $24,000, according to Motley Fool Money's research on average household debt. Here's a closer look at how much people pay per month.

The average car payment for new cars

The average new car owner with an auto loan pays $735 per month, according to data from the credit bureau Experian. While it doesn't tell us how many years the average car loan is, the total amount paid over the loan term could easily be higher than the $24,000 average figure mentioned above.

If you have a $735 monthly payment for five years, your lifetime payment on that loan will be $44,100. A good portion of this will be interest, but how much varies by person.

Our data shows that average car payments are pretty close across all credit tiers.

One thing that's worth noting, though, is that those with subprime credit may have a more difficult time finding a lender willing to work with them. They may also finance their loans over a longer term, resulting in similar monthly payments to borrowers with higher credit but much higher overall interest payments over the life of the loan.

The average car payment for used cars

Used cars are significantly cheaper, and this is reflected in their monthly payments. The average monthly used car payment for borrowers of all credit levels was $523 per month. Here's a more detailed breakdown based on credit score.

The data doesn't tell us a lot about the types of used cars these drivers are buying. A car that's only one or two years old generally costs substantially more to purchase than a car that's 10 years old. This can affect the average monthly payment.

How drivers can save on their car payments

Unless you're buying a car outright, there are two stages to the process: You need to find an appropriate vehicle, and you need to choose a lender. Shopping around is important in both cases.

See if you can get pre-approved for some auto loans in advance of car shopping so you know what kind of terms are available, what your interest rate might be, and most importantly, what kind of budget you have.

Once you have this information, you can start shopping. You may want to do some digging into car insurance companies as well. Compare rates from three to five insurers to see which one offers the most affordable coverage for your needs. Then, when you're happy with the providers you've chosen, you can go ahead and close the deal.