Record High Car Payments Continue Amid Affordability Challenges
The average monthly payment for new cars has reached an unprecedented level in the first quarter, as many American households grapple with rising costs. According to LendingTree’s Q1 2026 report, citing Experian data, the average monthly payment climbed 2.9% from the previous year, hitting $770.
New car lease payments also saw a notable increase, with the average monthly lease payment rising 3.2% year over year to $619. On the other hand, payments for used cars increased moderately, up by 1.5% to an average of $531 per month.
When looking at borrowers based on credit scores, those classified as non-prime (scores between 601 and 660) had the highest average monthly payments for new cars at $811. Subprime borrowers, with scores ranging from 501 to 600, followed closely with payments of $792. In contrast, super prime borrowers (781 to 850) enjoyed lower monthly payments, averaging $753.
Further details from Experian revealed that the average loan amount for a new car in the first quarter stood at $43,925, while for used cars, it was $27,070. The amount for new cars saw a slight increase from $43,582 in the previous quarter, while the used car loan amount decreased from $27,528.
Interestingly, borrowers with scores between 661 and 780 took out the largest loans for new vehicles, averaging around $46,244. In the used car segment, super prime borrowers had the highest average loan amounts at $29,599, according to Experian.
The uptick in consumer loans can be attributed, at least in part, to surging car prices. New car prices rose by 0.2% year-over-year, while used vehicle and truck prices dropped by 2%, as per the May consumer price index (CPI) data from the U.S. Bureau of Labor Statistics (BLS).
The New York Fed reported that outstanding auto loan debt in the U.S. reached $1.685 trillion in the first quarter of 2026, marking a 57.3% increase from $1.71 trillion in the same quarter of 2016. Notably, home loans dominate consumer debt, accounting for 70.2%, while auto loans make up about 9%, slightly edging out student loans, which total $1.658 trillion.
In the first quarter of 2026, auto loan originations rose to $182.1 billion, a small increase from $180.8 billion in the previous quarter, but still below last year’s peak of $187.9 billion in the second quarter. The record for auto loan originations was set in the second quarter of 2021, totaling $201.9 billion, based on data from the New York Fed.
Demographically, Americans in their 30s and 40s were the most active in taking out auto loans, securing $38.6 billion and $40 billion, respectively. They slightly outpaced borrowers in their 50s, who took out loans totaling $38.3 billion. Meanwhile, consumers aged 18 to 29 and those in their 60s both secured about $25.3 billion in auto loans during this period.
