automobile
When buying a car in 2025, reality checks as soon as you start crunching the numbers. New data from Experian shows that the average monthly payment for a new vehicle rose to $748 as of the third quarter of 2025, landing uncomfortably close to the psychological $750 mark. Prices aren’t doing buyers any favors either, and while the market is calmer than it was at the height of the pandemic chaos, “quieter” doesn’t automatically mean “cheap.”
Experian’s snapshot from Q3 2025 puts the average new car transaction price at $42,332, coupled with an average interest rate of 6.56%. Buyers are also extending loans for longer, the average term is now 69 months and around 81% of new car purchases are financed. What really stands out is the speed of the climb. In the fourth quarter of 2019, the average new car payment was $554. By the third quarter of 2021, it had risen to $617, and by the end of 2022 it jumped to $716. In the third quarter of 2023 it was $726 and in the fourth quarter of 2024 it was $742. Now, in 2025, the average is $748 and it still feels like it could continue to rise.
Used cars are still getting cheaper every month, but “cheaper” in this sentence means a lot of work. The average used car payment reached $532 in Q3 2025, coupled with an average transaction price of $27,128 and a hard average interest rate of 11.40%. The average term is also long at 67 months, although slightly shorter than new. Another twist from Experian: Far fewer used car buyers finance at all, around 35% take out loans. This suggests that many buyers are either bringing more cash, buying fewer cars, or forgoing it altogether.
The result is not only that payments are higher, but also that the levers to control them have become smaller. Longer terms can make a monthly figure seem friendlier, while buyers are quietly locked into nearly six years of payments, which is a long time to be exposed to loss of value or life changes. As payments of more than $700 go from rare to routine in a few years, the smart person treats the monthly payment as a budget item, purchases the loan as aggressively as the vehicle and is willing to walk away if the math doesn’t make sense.
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Darryl Taylor Dowe is an experienced automotive professional with a proven track record of leading successful companies and providing strategic advice across the automotive industry. With years of hands-on experience in both business operations and market development, Darryl has played a key role in helping automotive brands grow and adapt to a rapidly evolving landscape. His insight and leadership skills have earned him recognition and contributions as a trusted expert Automobile addicts reflect his deep knowledge and passion for the business side of the automotive world.
