Edited by Samuel MountjoyAmericans’ Purchasing Power Reflected in Higher-Dollar Auto Loans
Quick Answer
More consumers are taking on larger auto loans, with the average car loan payment reaching $687 in September 2025. This may be reflective of consumer willingness to spend more on a ride than in previous years.
The average car payment has risen by 9% over the past two years to a nationwide average monthly payment of $687, according to anonymized Experian data from September 2025. Similarly, monthly lease payments have also increased, from an nationwide average of $592 in September 2023 to $660 in September 2025—an 11% jump.
Average Monthly Car Payments
New car purchases are even higher: Experian's State of the Automotive Finance report from the third quarter of 2025 shows more than 1 in 6 new car purchasers were paying more than $1,000 a month for financing, as well as 8% of leased vehicles.
Percentage of Car Payments by Payment Amount
And according to the U.S. Department of Transportation, owning and operating a vehicle cost Americans more than $12,000 a year on average in 2024. This figure factors in fuel, repairs, maintenance, the cost of the vehicle itself and the cost to insure it.
Average Annual Total Cost to Own a Vehicle
In some states, drivers are paying at least $12,000 annually—or $1,000 per month—just for the monthly payment and insurance, according to Experian data. That's leaving many drivers with less money for fuel, wiper fluid and regular oil changes, not to mention other items in their shopping basket, which are also rising in price.
One big reason consumers remain concerned about looming inflation is that they're seeing it affect what was already one of the most costly items for most Americans: driving. Many regular drivers are seeing their monthly payments for financing and insurance rising faster than their incomes.
Among the costs of driving that have risen for many drivers in recent years, the cost of auto insurance premiums has increased dramatically. Nationwide, the average monthly premium payment has risen from $167 a month in September 2023 to $194 monthly in September 2025—a 16% increase.
Auto insurance premiums can vary even more than auto payments. Even one violation or incident can mean a jump in a monthly premium payment by 15% to 20% on average, according to Experian data. And premiums in one city can easily be twice that of another nearby.
| Average Annual Insurance Premium by Driving Record | |
|---|---|
| Clean Record | $2,176 |
| 1 Violation | $2,653 |
| 1 Incident | $2,506 |
Source: Experian data from September 2025
So it's not a surprise that consumer confidence surveys show many Americans are becoming pessimistic. And that's despite numerous economic indicators—unemployment rates, inflation, stock values—generally pointing in the right direction for much of 2025.
Auto expenses, which comprise more than 10% of a consumer's typical spending, according to Bureau of Labor Statistics data, are busting many household budgets. And as we'll show, in several states the average monthly payment (auto loan payments plus insurance premiums) is more than $1,000 per month.
Average Monthly Car-Related Payments Exceed $1,000 in Texas, 3 Other States
Drivers in the U.S. with an auto loan payment are paying an average of $921 a month for car payments and insurance premiums, according to Experian data. But the averages vary, and in four states they're currently above $1,000 a month.
Total Average Car Expenses
| Average Monthly Car Payment | Average Monthly Full Coverage Premium | Total Average Monthly Payment | |
|---|---|---|---|
| Alabama | $716 | $143 | $860 |
| Alaska | $711 | — | — |
| Arizona | $731 | $173 | $903 |
| Arkansas | $714 | $180 | $893 |
| California | $715 | $175 | $890 |
| Colorado | $681 | $186 | $867 |
| Connecticut | $609 | $306 | $915 |
| Delaware | $627 | $276 | $903 |
| District of Columbia | $648 | $200 | $848 |
| Florida | $707 | $223 | $930 |
| Georgia | $733 | $283 | $1,017 |
| Hawaii | $694 | — | — |
| Idaho | $646 | $96 | $742 |
| Illinois | $665 | $171 | $836 |
| Indiana | $668 | $156 | $823 |
| Iowa | $633 | $143 | $776 |
| Kansas | $675 | $166 | $841 |
| Kentucky | $653 | $239 | $892 |
| Louisiana | $765 | $226 | $991 |
| Maine | $597 | $121 | $718 |
| Maryland | $687 | $325 | $1,012 |
| Massachusetts | $626 | $238 | $864 |
| Michigan | $586 | $244 | $830 |
| Minnesota | $632 | $147 | $779 |
| Mississippi | $651 | $171 | $822 |
| Missouri | $734 | $204 | $937 |
| Montana | $665 | $152 | $817 |
| Nebraska | $672 | $175 | $847 |
| Nevada | $720 | $261 | $981 |
| New Hampshire | $649 | $104 | $753 |
| New Jersey | $615 | $293 | $908 |
| New Mexico | $648 | $134 | $781 |
| New York | $773 | $275 | $1,048 |
| North Carolina | $730 | $163 | $893 |
| North Dakota | $649 | $213 | $862 |
| Ohio | $619 | $176 | $795 |
| Oklahoma | $727 | $142 | $869 |
| Oregon | $609 | $186 | $794 |
| Pennsylvania | $616 | $207 | $824 |
| Rhode Island | $578 | $260 | $839 |
| South Carolina | $672 | $265 | $937 |
| South Dakota | $660 | $116 | $776 |
| Tennessee | $692 | $174 | $866 |
| Texas | $816 | $210 | $1,027 |
| Utah | $635 | $194 | $829 |
| Vermont | $669 | $120 | $789 |
| Virginia | $628 | $196 | $824 |
| Washington | $679 | $200 | $878 |
| West Virginia | $620 | $189 | $809 |
| Wisconsin | $704 | $167 | $871 |
| Wyoming | $752 | $114 | $866 |
Source: Experian data from September 2025
Note: Auto insurance premium data not available in Alaska and Hawaii
In four states—Georgia, Maryland, New York and Texas—combined payments exceed $1,000 monthly. Higher-than-average auto payments help explain why. Texas routinely has the highest monthly vehicle payments in the nation. (Texas' average monthly insurance premiums are in fact below the national average.)
Those getting off more easily with their auto financing are drivers in northern New England, where both car payments and insurance costs are lower. That's perhaps due to a combination of less expensive cars purchased with higher credit scores (which can lower loan payments) and lower insurance premium rates than other parts of the U.S.
Why Are Monthly Car Payments Getting More Expensive?
The reasons car costs have risen over the past five years is no longer news. A combination of higher interest rates, lower inventory and more drivers choosing more expensive vehicles have meant car payments climbed even faster than inflation from 2023 to 2025.
Although supply and demand and higher interest rates were the primary drivers buffeting car payment levels over the past few years, a third—tariffs—is also likely to be a factor.
The total amount tariffs add to the price of a new car varies, depending on tariff rates on auto manufacturing inputs like aluminum or the finished car itself being undocked at a U.S. port. Considering the different scenarios, analysts estimate tariffs could add an additional $1,000 to $6,000 or more per vehicle.
Some drivers can still find ways to save on one or both of these monthly expenses, however. Shopping for auto insurance can possibly provide more immediate relief to drivers. For example, drivers who have purchased coverage via Experian's insurance marketplace save nearly $1,000 annually on average.
Improving your credit score could mean buying or refinancing a car at more favorable rates as well. Raising your VantageScore® credit score from near prime to prime, for example, could mean the difference between paying a 14% APR for a used car loan on average to 9.4%, according to Experian data. That savings has the potential to reduce auto loan payments by hundreds of dollars, depending on the size and term of the loan.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
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About the author
Chris Horymski
Chris Horymski leads Experian Consumer Service’s data research for Ask Experian, where he publishes insights and analysis on consumer debt and credit. Chris is a veteran data and personal finance journalist and previously wrote the Money Lab column for Consumer Reports and headed research at SmartMoney Magazine.
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