American families are drowning in car debt as average monthly payments hit a staggering $748, while lenders push desperate buyers into ruinous 100-month loans that trap them in financial servitude for nearly a decade.
Story Highlights
- New car payments surge to $748 monthly in Q3 2025, up from $554 in 2019
- Extended loan terms now averaging 69 months mask true financial burden on families
- Used car buyers face “disgusting” 11.4% interest rates despite lower purchase amounts
- Credit score disparities reveal systemic inequities in automotive financing
Biden-Era Inflation Creates Car Payment Crisis
Experian’s Q3 2025 data reveals the devastating legacy of Biden administration economic policies, with new car payments reaching $748 monthly—a 35% spike from pre-pandemic levels of $554 in Q4 2019. This astronomical increase directly correlates with pandemic-era supply chain failures, runaway inflation, and Federal Reserve mismanagement that pushed interest rates to punitive levels. The average transaction price now sits at $42,332 with 6.56% interest rates, forcing 81% of buyers into financing arrangements that would have been unthinkable just five years ago.
The timeline tells a clear story of progressive policy failure. While families struggled with lockdowns and job losses, car payments climbed relentlessly: $617 in Q3 2021, $700 by late 2022, $726 in Q3 2023, and $742 in Q4 2024. This represents a systematic wealth transfer from working families to financial institutions, enabled by policies that prioritized corporate bailouts over household stability.
Extended Loan Terms Hide True Cost Burden
Lenders are exploiting family desperation by extending average loan terms to 69 months for new cars and 67 months for used vehicles—creating debt traps that far exceed vehicle depreciation cycles. Cars lose 20-30% of their value in the first year alone, yet families are locked into nearly six-year payment schedules that guarantee negative equity. This predatory lending mirrors the subprime mortgage crisis, where monthly affordability masks catastrophic long-term financial exposure.
The emergence of 100-month car loans represents the ultimate exploitation of American families. These eight-year commitments exceed most vehicle lifespans and trap buyers in perpetual debt cycles where they’re making payments on cars already headed to junkyards. Such arrangements prioritize lender profits over family financial security, creating modern debt slavery disguised as consumer choice.
Credit Score Apartheid Punishes Working Families
The financing system reveals a disturbing credit-based caste system that punishes working-class Americans. Super-prime borrowers with 781-850 credit scores secure $727 monthly payments, while nonprime buyers face $793 monthly—a $66 penalty for less-than-perfect credit. This disparity forces struggling families to pay premium prices precisely when they can least afford it, perpetuating cycles of financial hardship that progressive policies claim to address.
Used car buyers face even more predatory treatment with 11.4% interest rates that approach credit card levels. These “disgusting” rates, as industry observers note, target families seeking affordable transportation options yet burden them with payments that often exceed new car financing costs when interest is factored over time. The system punishes prudent attempts to avoid new car debt while enriching lenders through compound interest exploitation.
Sources:
The Average New Car Payment Has Reached Almost $750 a Month
Average New Car Payments Are Closing in on $750 a Month
The Average New Car Payment Was Nearly $750 A Month In Q3 Of 2025
