What’s the Average Monthly Payment for a Used Car (And, What Should You Really Pay)?

| Car Buying Tips

Whether it’s used or new, the average monthly car payment is taking a jump this year, hitting Americans who need a nicer, newer vehicle right in their wallets.

But, it may not have to be that way …

Every quarter, credit bureau, Experian, releases a report on auto lending every quarter, and the latest showed some sizable jumps. The bureau’s report covering April through June of 2018 revealed the average monthly payment for a new car in the U.S. was $525 a month, which was up from $505 one year ago.

High monthly payments are a major reason why many people choose to buy a used car when they need to upgrade their vehicle. Those monthly payments, however, are also on the rise.

Experian reported the average monthly payment for a used car in the U.S. climbed to $378 per month, up from $365 one year ago. While that increase may not seem extremely significant, for a household with a tight budget, it equates to an extra $156 a year, which may need to come out of money budgeted for groceries, gas, or other necessities.

Loan amounts for both new and used cars also hit record highs in the second quarter.

What seems a bit unfair is the fact that car payments are even higher for individuals with less than ideal credit. According to Experian, if your credit score is 600 or lower, you’ll be paying nearly $400 a month for a used car.

used car payment averages

That seems a little unfair to people who may be trying to dig themselves out of a tough financial situation, almost like kicking them when they’re down. Unfortunately, that’s the reality. But, it’s not your only option.

The good news is that there are used car dealers in Wisconsin, such as 199ride, that work with those who have credit problems to find a solution that best fits their budget, helps them rebuild credit, and puts them in a vehicle they love.

Despite rising prices, the decision to purchase a used car, truck, or SUV is a smart one for most people. A Wall Street Journal (WSJ) report released in September shows a widening gap between new and used vehicle prices.

The average price of a new vehicle in the second of quarter of 2018 was nearly $36,000, while the average price of a used car (one that is only one to three years old) was less than $22,500 … that’s a difference of more than $13,000.

It’s should come as no surprise that demand for used cars in the U.S. is on the rise. As new vehicle prices increase even further under the possibility of trade wars and concerns around tariffs, used cars become more attractive. That means if you are in the market to upgrade your car, it may be in your best interest to act now as prices could continue to climb.

The WSJ also reports that, unlike in past years, many used car dealerships currently have more popular crossover and sport-utility vehicle models that people want. So, the likelihood of finding a car you’ll love could be high right now.

Finding a Used Car in Wisconsin with Less-than-Perfect Credit

If your credit score isn’t excellent, it can be tough to find lenders who’ll give you an auto loan for the car you need. Experian’s quarterly report also indicated auto lenders are pulling back from offering loans to customers with lower-than-average credit scores.

At 199ride, we know that you are not your credit score. We work with people in cities around Wisconsin to find used cars and a payment plans that work for them. That’s why we call ourselves “a dealer for the people!”

The proof is in our name. We consistently put people in nicer, newer vehicles with monthly payments that are lower than average. And, while it depends on numerous factors, we regularly set up financing for our customers with payments as low as $199 per month and a down payment of just $199.

If you’re ready for a Nicer Newer™, Worry-Free used car, SUV, or truck, or you know someone who could use our help, turn to 199ride. Check out our inventory of pre-owned vehicles online or drop by one of our five Wisconsin dealerships: Green Bay Auto, Appleton Auto, Wausau Auto, and La Crosse Auto. Questions? Call us at 800-500-1133 for more information.