If you're considering a used car purchase, you might wonder about the average financing costs. Many buyers choose to finance, as approximately 42% of used car sales involve an auto loan. The average used car payment in 2024 is currently $525, which is over $100 lower than the average new car payment. Here’s a breakdown …
What Is the Average Used Car Payment in 2024?
If you’re considering a used car purchase, you might wonder about the average financing costs. Many buyers choose to finance, as approximately 42% of used car sales involve an auto loan. The average used car payment in 2024 is currently $525, which is over $100 lower than the average new car payment. Here’s a breakdown of factors affecting used car loans, including credit scores, loan terms, and other financial considerations.
Comparing New and Used Car Loan Averages
Understanding how new and used car loans differ can help you make an informed decision. While the average interest rate on used car loans is higher than for new cars, loan amounts and monthly payments tend to be lower for used vehicles.
| Category | New Cars | Used Cars |
|---|---|---|
| Monthly payment | $734 | $525 |
| Loan amount | $40,927 | $26,248 |
| Interest rate | 6.84% | 12.01% |
| Loan term | 68 months | 67 months |
| Credit score | 753 | 689 |
How Your Credit Score Affects the Average Used Car Payment in 2024
Your credit score plays a major role in determining your loan terms and interest rate, which directly impacts your monthly car payment. A higher credit score can mean lower interest rates and more manageable payments. Here’s a look at how credit scores affect payments:
| Credit Score Range | New Car Monthly Payment | Used Car Monthly Payment |
|---|---|---|
| Super prime (781-850) | $717 | $522 |
| Prime (661-780) | $742 | $518 |
| Near prime (601-660) | $765 | $535 |
| Subprime (501-600) | $749 | $536 |
| Deep subprime (300-500) | $719 | $532 |
The average used car payment in 2024 can vary based on your credit profile, and maintaining a higher score could help you secure a better rate.
Factors That Determine Your Monthly Car Payment
Several key factors will influence your car payment. Knowing how these work can help you budget effectively.
- Down Payment: A larger down payment means a smaller loan amount, which can lower your monthly payments.
- Loan Amount: This includes the vehicle price, taxes, fees, and add-ons. A smaller loan means less to repay each month.
- Interest Rate: Determined by your credit score, the interest rate impacts the cost of borrowing. A good credit score typically leads to a lower rate.
- Loan Term: The repayment period affects your monthly payment; a longer term results in smaller monthly payments but increases total interest paid.
Understanding Loan Terms and Payment Options
When considering financing options, it’s essential to think about the loan term. For example, on a $26,000 loan at 12% interest:
- A 48-month term results in a $685 payment, with $6,865 in total interest.
- A 60-month term results in a $578 payment, with $8,701 in interest.
- A 72-month term results in a $508 payment, with $10,598 in interest.
In 2024, the average term for a used car loan is 67 months. Deciding on a shorter loan term may save you on interest costs, even if it means a higher monthly payment.
More About Interest Rates by Credit Score
The average used car loan interest rate in 2024 is 12.01%. Here’s a breakdown of rates by credit score range:
| Credit Score Range | New Car APR | Used Car APR |
|---|---|---|
| Super prime (781-850) | 5.25% | 7.13% |
| Prime (661-780) | 6.87% | 9.36% |
| Near prime (601-660) | 9.83% | 13.92% |
| Subprime (501-600) | 13.18% | 18.86% |
| Deep subprime (300-500) | 15.77% | 21.55% |
Improving your credit score before buying could reduce your rate and help you avoid high payments.
Tips for Getting the Best Used Car Loan
Here are some tips to help you secure a favorable loan:
- Check Your Credit: Review your credit report and take steps to improve your score if needed. This can increase your chances of qualifying for better rates.
- Set a Budget: Consider your down payment and monthly payment range. Research used car prices to get a realistic budget.
- Compare Lenders: Interest rates vary among lenders. Get preapproved by multiple lenders to compare rates and terms.
The Bottom Line: Average Used Car Payment in 2024
The average used car payment in 2024 is $525, but your rate, loan term, and monthly payment depend on many factors. Shopping around for the best rates and considering a larger down payment can help you secure an affordable car payment. By understanding these financial components, you can make a confident decision about your next vehicle purchase.
If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!
Eric Counts
Eric Counts is the visionary entrepreneur behind CreditNerds.com, a leading name in the credit repair and business funding industry. With a passion for financial empowerment and a commitment to helping individuals and businesses achieve their financial goals, Eric has built CreditNerds.com into a trusted resource for credit repair and funding solutions.
