Auto Loan Payments Have Jumped Nearly 40% Since 2019

The average monthly payment on a new vehicle loan has climbed to $785 a month, up almost 40% since 2019, according to TransUnion’s Q2 2026 Credit Industry Insights Report.

Vehicle price, amount financed, down payment, interest rate, and term of the loan are all factors lifting new vehicle monthly payments, according to Satyan Merchant, Senior Vice President, Automotive and Mortgage Business Leader at TransUnion.

But the two main factors really driving that $785 monthly payment amount are vehicle prices, which remain high, and the amount financed, he explained. Let’s take a look at each of these factors.

In June 2026, the average new car sold for $49,758, according to Kelley Blue Book. That means consumers are shelling out almost $50,000 for a new vehicle. And they are financing most of that purchase price. The average amount financed on new auto loans is $44,421, according to TransUnion.

A high purchase price plus a high amount financed leads to a high monthly payment. To cope with high car prices, consumers are taking out bigger and longer loans. Almost 1 in 4 financed new-vehicle buyers chose an 84-month loan or longer in the second quarter of 2026, according to Edmunds.

Consumers Want New Vehicles

Merchant also said consumers have “an insatiable demand” for new vehicles. Buyers want the newer technology, and they are willing to pay a high price. Buyers also are choosing larger vehicles.

“Cars are getting bigger, people are opting more for SUVs and trucks and hybrid and crossovers. And so people are just buying more car, and that’s why a lot of these monthly payments are going up,” Merchant said.

Monthly payments on used cars are also on the rise. The average monthly payment on a used vehicle is $544. This is almost a 40% increase since 2019. The average amount financed on used auto loans is $27,633, according to TransUnion.

“People are just buying more car, and that’s why a lot of these monthly payments are going up.” — Satyan Merchant, TransUnion

Maintenance and insurance costs have also gotten more expensive for new and used vehicle buyers, Merchant said.

“The total cost of ownership and operating a vehicle continues to go up,” Merchant said. “Cars are just more expensive and it’s more expensive to insure and repair a vehicle.”

Lower market interest rates could reduce borrowing costs for consumers taking out or refinancing auto loans, although Federal Reserve rate changes do not translate directly into lower auto-loan rates.

Merchant said lower interest rates could bring down payments on newly issued auto loans. Existing fixed-rate loan payments, however, would not change unless borrowers refinanced.

Auto Inventory Bounces Back

Merchant said pandemic-era production and sales disruptions reduced the number of vehicles that subsequently entered the used market. But now auto inventories have bounced back. More than 16 million new vehicles were sold in 2025, exceeding many industry forecasts, Merchant said.

“When you have a good sales year for new vehicles, it also provides a good supply of used vehicles two to three to four years down the road. And when there’s more supply of vehicles, it helps relieve pressure on used vehicle pricing,” Merchant said.

Auto Delinquencies Stay Steady

Even with all the expenses of car ownership, many consumers seem to be managing their payments. TransUnion’s auto-loan delinquency rate in the second quarter of 2026 was 1.51%, slightly up from 1.49% in the second quarter of 2025.

“Delinquency ticked up in our most recent report by only two basis points. I consider that flat. So while expenses keep going up, average payments go up, it seems like lenders and consumers are figuring out a way to kind of manage along,” Merchant said.

TransUnion’s data also show that more subprime consumers have been taking out vehicle loans over the past several quarters.

Merchant said it was encouraging to see growth in the lower credit tiers while the overall delinquency rate in the market remained relatively flat.