Buying a new car can be exciting, but the reality of those monthly payments is a different story. Few people can walk into a dealership and pay cash, irrespective of whether they’re eyeing a RAV4 or a CLA.
Instead, purchasing a car means figuring out how much you can afford to pay each month. Even with a well-planned budget and reasonable car payment, there’s no guarantee it won’t eventually become a financial strain—something that’s increasingly happening to a growing number of Americans.

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Refinancing a car loan to lower payments is an option for some, but not everyone can take advantage of it. According to data from Fitch Ratings, highlighted by CarScoops, the number of Americans falling behind on their car payments is at its highest in 30 years.
More than 6 percent of subprime borrowers are at least 60 days overdue, and 3 percent are more than 90 days behind. This trend signals trouble for both the economy and the auto industry.
A Rocky Start to the Year
These figures were as of the end of January, with February data still unavailable. Typically, delinquencies rise in the first two months of the year before improving in March, but given how high the numbers are, it’s uncertain how much of a turnaround we can expect. It’s crucial to point out that the 6.56 percent of borrowers who are at least 60 days overdue are all subprime borrowers.

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These borrowers have a credit score of 640 or lower, making them the most vulnerable to the financial strain caused by inflation. Inflation drives up costs on everything from eggs to gas for their cars. Even if they stick to a modest vehicle and avoid splurging on a large SUV or a luxury sedan, inflation still hits hard. In contrast, the delinquency rate drops significantly to just 0.39 percent for prime borrowers with good credit.
The Economy Is Behind Buyers’ Struggles
It’s not just inflation that’s making it difficult for people to keep up with their car loans. Economic growth began to slow toward the end of Joe Biden’s presidency, and this trend has carried over into Trump’s term.
New car prices have reached record highs, making it tough to find an affordable option on a tight budget. Additionally, rising interest rates have made financing car loans much more expensive. While zero-percent financing deals are available, they’re often out of reach for subprime borrowers who need them the most.
In the fourth quarter of 2024, the average new vehicle was financed for $42,113, highlighting just how costly it is to buy a new car in today’s market. So, what does that mean for your monthly payment?
If you put down a large amount of cash, it might not be too bad, but a staggering 18.98 percent of people face car payments of over $1,000 per month. That’s a significant burden, especially with the average car loan now lasting 68.8 months.
The average new car payment is also high at $754, meaning many people feel the pinch. Keeping up with monthly car payments will only get harder if these trends continue. Unfortunately, the data shows that while cars may be more expensive than ever, wages simply aren’t keeping pace.
Source: Fitch Ratings via CarScoops