Average monthly car payments in 2024

What is the average car payment in the U.S.?

If you're in the market for a new car, you might be asking yourself — how much is the average car payment? Experian reports that, as of the first quarter of 2024, new vehicle owners paid an average of $735 a month on their vehicles, while used car owners paid $523. Since these figures represent monthly car payment averages, they do not necessarily represent what any single vehicle owner is actually paying. Instead, these figures indicate a certain ballpark range that vehicle owners fall into depending on their own personal and financial details.

So, how much should your car payment be? The average U.S. car payment for new and used vehicles should give you a starting point for your own monthly payments. To get a more concrete figure, you'll need to consider your creditworthiness and income level, the type of car you're purchasing and its cash value, and the size, terms, and length of your auto loan.

What factors determine your monthly car payment?

There are many different tools to help you get a better idea of what you'll be paying toward your vehicle every month. The Chase Auto Payment Calculator is one such tool that can simplify this process for you. However, to get a more thorough understanding of what goes into these calculations, consider the following factors that can influence your monthly car payments.

Principal

One of the biggest factors in calculating your monthly payments is the amount of money you borrow to purchase your vehicle, also called your loan principal. A higher loan amount means paying back more; you will need to pay off the principal you borrowed plus the interest on the loan. 

Interest

You can think of interest as the amount you are being charged to take out a loan. You will need to pay interest on your loan in addition to paying back the initial amount you borrowed. The higher your interest rate, the higher you can expect your monthly car payments will be. The interest rate for your auto loan depends on the following factors:

• Your credit history. Like other loans, your credit history is one indication of how likely you are to make your payments every month. To determine this, creditors look into your debt to income ratio and credit score. The higher your credit score, the lower your interest rate may be.
• The type of vehicle you're looking to buy. If you are interested in buying a used car, your interest rate might be higher because the vehicle has already begun to depreciate. However, you may pay less overall since a used car's selling price is typically cheaper. Likewise, while new cars are more expensive in the long run given their value, the interest rate might actually be lower than it would be for a used vehicle since a new car's value has not begun to depreciate.

Fees and taxes

There are a lot of additional fees and taxes included as part of your purchase agreement.  These additional costs are usually folded into your auto loan so they can become a part of your monthly loan payments.

Loan term

Auto loan terms are a tricky thing to consider when calculating your desired monthly loan payments. Selecting a longer loan term can generally lower your monthly car payment since you have more time to pay off the entire loan. However, the longer your loan remains active, the more interest you may pay over this span of time. Finding the right balance here requires determining how much you are willing to pay overall and how quickly you would like to pay off your loan. 

Additional considerations to lower your monthly car payment

As you may have deduced so far, a good way to get the best deal on your average monthly car payment is by tweaking one or some combination of the above factors before making your purchase. All of the following suggestions may not be available to all buyers, but one or some combination of factors may prove beneficial to you.

Borrow less

How much you need to borrow depends on your circumstances, but borrowing less can result in a lower average car payment. Buying a new car or an expensive or luxury brand can often require a higher loan than buying a used or inexpensive vehicle. If you make a large down payment upfront, you may need to borrow less to finance the remaining cost of the vehicle. If you still owe money on a previous car purchase, your lender may add the new loan amount to your existing loan, resulting in a higher principal. If you own your vehicle and are trading in, the dealer may give you credit toward another vehicle or cut you a check for your trade-in's value, which can lower the amount of money you need to borrow.

We recommend these tips to reduce the amount you need to borrow to finance your new car:

• Choosing a less expensive car.
• Opting for a used car over a new car.
• Selling or trading in your current car.
• Putting more money down upfront.
• Negotiating the car's price with the dealer.

Lower your interest rate

There are a few ways you can work on lowering your interest rate.

• Improve your credit score. This may take time to accomplish, and thus may not be available to buyers with a time constraint. However, if you do have time to build up a poor or fair credit score, you can save money on an auto loan in the long run. To improve your credit score, make payments on any existing debts or loans on time each month, reduce your debt to income ratio, and clear up any incorrect blemishes on your credit file, if applicable. To make this process easier, Chase Credit Journey^® offers free tools for managing your credit score, including alerts and free credit score checks. 
• Compare multiple offers. There are many ways to obtain a car loan, including through banks, credit unions, online lenders, and car dealerships. It is a good idea to shop around to find out what rates you qualify for at each so you can choose the best deal for you. Getting estimates and applying for pre-approvals are good ways of getting an idea about what each lender has to offer. With Chase Auto, you can shop online inventory from home and connect with local dealers.
• Refinance your existing loan, or refinance your new loan later. Refinancing your current loan or your new loan later on is an option if your credit score improves over time. Taking this route may result in securing a lower interest rate and save you money overall.