How Much Is the Monthly Payment on a Car Loan in 2025? Average Costs and Real-World Scenarios

The average monthly payment on a new car loan is $741, and the average monthly payment on a used car is $550, according to the most recent data from Edmunds. Why so much? Post-pandemic car prices have led to significant increases in how much the average family spends on a car each month, and this year’s tariffs continue to drive up costs.

Below, we’ll review what affects a monthly car payment, plus how much you’ll need to budget each month for cars between $20K and $50K.

Table of Contents

1. Average car payment
   1. 1. The car
   2. 2. Down payment
   3. 3. Annual percentage rate (APR)
   4. 4. Loan term
2. $20,000 car
3. $30,000 car
4. $40,000 car
5. $50,000 car
6. How much is too much for a car payment?

How much is the average car payment?

The average car payment at the start of 2025 was $741, up $6 over the same period the year before. Used car payments were also up (by $4), with the average borrower paying $550 per month.

It’s important to remember these are just averages. You can use our auto loan calculator to determine a more accurate payment. The amount you pay for a car every month will vary depending on the following factors:

1. The car

In 2025, the average cost of a new car is near a record high—just below $50,000, according to Kelley Blue Book. Used car prices are also at historic highs; at the start of 2025, the average price was $25,565. Purchasing a more affordable car is the most impactful way to keep your monthly costs down.

2. Down payment

By making a sizable down payment, you can finance significantly less. However, you need to have the cash on hand to make a large down payment, and don’t forget you also have to budget for sales tax, title fees, loan processing fees, and registration, due at or around signing.

3. Annual percentage rate (APR)

The APR represents the loan costs (interest rate and fees). A higher auto loan rate means you’ll spend more over the life of the loan and more each month. Some dealerships might advertise 0% APR, but that’s usually restricted to only the most highly qualified buyers (i.e., credit scores in the 800s).

According to Edmunds, the average APR is 7.3% on a new car and 11% on a used car. Your credit score will affect the APR you qualify for.

Winner

In my roundup of the best auto loans, I found that Southeast Financial Credit Union had some of the lowest rates available. However, my top choice for a lender is still LightStream because it has no vehicle restrictions, you can get same-day funding, and the cash-in-pocket method makes it easier to negotiate car prices down.

4. Loan term

The typical car loan term is between five and six years. By opting for a longer loan term, you can spread your payments out over more months. This lowers your monthly cost, but it means you’ll spend more on interest in the long term.

How much is the monthly payment on a $20,000 car?

For $20K, you can buy a fair number of used vehicles but only one new model: the 2025 Nissan Versa S, which starts at $17,190. This is noteworthy because, a decade ago, you could buy a 2015 Nissan Versa S for under $13K—and cars like the Chevy Spark and Toyota Yaris were also priced well under $20K.

Assuming $0 down, a typical six-year repayment term, and an average new car loan APR of 7.3% or an average used car loan APR of 11%, here’s what monthly payments on a $20K car loan look like:

• New car: $343.87
• Used car: $380.68

The table below shows how various interest rates and payment terms can affect the monthly payment on a $20,000 car loan:

APR	Loan term (years)	Monthly payment
6%	3	$608.44
6%	5	$386.66
6%	7	$292.17
9%	3	$635.99
9%	5	$415.17
9%	7	$31.78
12%	3	$664.29
12%	5	$444.89
12%	7	$353.05
15%	3	$693.31
15%	5	$475.80
15%	7	$386/94
18%	3	$723.05
18%	5	$507.87
18%	7	$420.36

How much is the monthly payment on a $30,000 car?

For $30K, you could buy a brand-new car or a certified pre-owned (CPO) vehicle from a recent model year. For instance, a new 2025 Hyundai Sonata SEL goes for $28,000, and the base-level 2025 Subaru Forester is $29,995. You can find used or CPO models such as the 2023 Mazda CX-5, 2021 Cadillac CT5, and 2022 Jeep Grand Cherokee WK for right around $30,000.

Assuming $0 down, a typical six-year repayment term, and an average new car loan APR of 7.3% or an average used car loan APR of 11%, here’s what monthly payments on a $30K car loan look like:

• New car: $515.80
• Used car: $571.02

The table below shows how various interest rates and payment terms can affect the monthly payment on a $30,000 car loan:

APR	Loan term (years)	Monthly payment
6%	3	$912.66
6%	5	$579.98
6%	7	$438.26
9%	3	$953.99
9%	5	$622.75
9%	7	$482.67
12%	3	$996.43
12%	5	$667.33
12%	7	$529.58
15%	3	$1,039.96
15%	5	$713.70
15%	7	$578.90
18%	3	$1,084.57
18%	5	$761.80
18%	7	$630.54

How much is the monthly payment on a $40,000 car?

With $40K, you could drive home in a base-level 2025 Toyota Sienna or 2025 Ford Explorer, or you could look for vehicles that start in the low $30Ks and choose a higher trim level for more features, like active safety tech, ventilated leather seats, and upgraded infotainment systems.

You could also get a Tesla Model Y with a $40K loan; right now, a Tesla Model Y starts at $37,480.

Assuming $0 down, a typical six-year repayment term, and an average new car loan APR of 7.3% or an average used car loan APR of 11%, here’s what monthly payments on a $40K car loan look like:

• New car: $687.74
• Used car: $380.68

The table below shows how various interest rates and payment terms can affect the monthly payment on a $40,000 car loan:

APR	Loan term (years)	Monthly payment
6%	3	$1,216.88
6%	5	$773.31
6%	7	$584.34
9%	3	$1,271.99
9%	5	$830.33
9%	7	$643.56
12%	3	$1,328.57
12%	5	$889.78
12%	7	$706.11
15%	3	$1,386.61
15%	5	$951.60
15%	7	$771.87
18%	3	$1,446.10
18%	5	$1,015.74
18%	7	$840.71

How much is the monthly payment on a $50,000 car?

If you’re willing to finance $50K for a car, you could get a truck like the 2025 Chevy Silverado LT or even a luxury SUV like the 2025 Mercedes-Benz GLC.

Assuming $0 down, a typical six-year repayment term, and an average new car loan APR of 7.3% or an average used car loan APR of 11%, here’s what monthly payments on a $50K car loan look like:

• New car: $859.67
• Used car: $951.70

The table below shows how various interest rates and payment terms can affect the monthly payment on a $50,000 car loan:

APR	Loan term (years)	Monthly payment
6%	3	$1,521.10
6%	5	$966.64
6%	7	$730.43
9%	3	$1,589.99
9%	5	$1,037.92
9%	7	$804.45
12%	3	$1,660.72
12%	5	$1,112.22
12%	7	$882.64
15%	3	$1,733.27
15%	5	$1,189.50
15%	7	$964.84
18%	3	$1,807.62
18%	5	$1,269.67
18%	7	$1,050.89

How much is too much for a car payment?

Experts recommend spending no more than 10% to 15% of your monthly take-home pay on a car payment.

For instance, if you bring home $75,000 a year after taxes, and your monthly take-home pay is $6,250, the most you should spend on a car payment is between $625 and $938.

The table below includes examples of post-tax monthly take-home pay amounts and the recommended max you should spend on a car payment:

Monthly post-tax earnings	Max range for a car payment
$1,500	$150 – $225
$2,000	$200 – $300
$2,500	$250 – $375
$3,000	$300 – $450
$3,500	$350 – $525
$4,000	$400 – $600
$4,500	$450 – $675
$5,000	$500 – $750
$5,500	$550 – $825
$6,000	$600 – $900
$6,500	$650 – $975
$7,000	$700 – $1,050
$7,500	$750 – $1,125
$8,000	$800 – $1,200

It’s worth noting that the average after-tax monthly salary in the United States is $4,865, according to ZipRecruiter. Theoretically, that should mean a car payment of no more than $486.50 to $729.75. However, the average new car payment is currently $741, meaning many Americans are paying more than they can afford for a new car.

Capping your monthly payment at 10% to 15% is a good practice, but another percentage to keep in mind is 20%. That’s the max amount of your post-tax earnings that you should spend on your car, total. That means, collectively, the following monthly expenses should not exceed a fifth of your post-tax salary:

• All car payments (for multicar families)
• Fuel costs (or electricity bills for EV charging)
• Car insurance
• Car maintenance

These costs can vary significantly depending on the vehicle and the driver. For instance:

• Fuel: The average cost of gas in the U.S. is $3.22, according to AAA, but your fuel costs will depend on where you live (gas is more expensive in the western states), how you drive (if you have a lead foot, you’ll spend more), and the vehicle you have (for instance, a gas-guzzling truck vs. a hybrid hatchback).
• Car insurance: Insure.com says the average cost of car insurance is $1,895 per year, but this varies depending on your state, the number of vehicles and drivers you’re insuring, policy deductibles and limits, optional coverages, your driving record, and any discounts you qualify for.
• Car maintenance: According to AAA, car maintenance costs an average of $66 per month. However, this depends on the type of vehicle you drive, its age, and how you drive it.

So how much should you actually spend on a car payment?

These guidelines—no more than 10% to 15% of your take-home pay on a car payment and no more than 20% of your take-home pay on combined car expenses—are helpful, but the problem with blanket financial advice is that it can’t possibly apply to everyone.

I’ve covered the automotive market for 15 years. As a Certified Financial Education Instructor, I like to talk to people about their individual financial situations to help calculate how much car they can afford. Here are some of the things I encourage you to consider, beyond how much money you make:

• What debts do you have? If you’re already struggling with your mortgage and student loan payments, adding a large car loan into the mix can complicate things. And if you’re buried in credit card debt, I recommend you focus on paying that down, and simply pay cash for an old beater in the interim. (An old car will have high maintenance costs; this is meant to be a temporary solution while you focus on getting out of credit card debt.)
• What are your plans for the next five to six years? According to Experian, the average car loan term length is around 68 months for both new and used vehicles. That’s a five-and-a-half-year commitment. Think ahead about your next five years. Do you plan to get married? Have kids? Move to a new city? Travel extensively? Get a new job? Launch a new business? Understanding what major expenses you need to budget for, how your salary might change, and what new debts you plan to take on can help determine if you need to scale back how much you spend.
• What would you do if you lost your job? Do you have an emergency fund? Do you have strong enough credit to get a personal loan or line of credit to cover expenses until you land a new gig? If you’d struggle to pay bills if you lost your job—especially amid today’s economic uncertainty—I recommend spending far less than what you could afford on your current salary.