(José Niño, Headline USA) American auto debt surged to $1.68 trillion by the close of 2025, marking a 37 percent jump from late 2018 when the total sat at $1.23 trillion, CNBC reported. A new analysis by The Century Foundation and Protect Borrowers provided the data exclusively to the outlet.
Approximately 86 million Americans, about one in four, currently owe money on auto loans or leases.
The average starting balance for a car loan hit $33,519 at the end of 2025, climbing from $24,782 in late 2018. During the same period, the typical monthly payment rose to over $680 from $506.
“People are seeing more and more of their paychecks eaten by their car payments,” said Angela Hanks, chief of policy programs at The Century Foundation.
The cost of vehicle ownership creates further burdens. Gasoline prices have spiked amid the Iran war, with the national average hitting $4.53 per gallon as of last Wednesday, according to AAA.
Escalating car prices have pushed many families to borrow more heavily. The average transaction price for a new vehicle has reached nearly $49,000, a significant leap from the $35,000 to $37,000 range in 2018, according to Edmunds.
“That’s a $12,000 to $14,000 move in less than a decade, and incomes haven’t kept pace,” said Ivan Drury, director of insights at Edmunds.
The inventory of affordable vehicles has essentially dried up.
“There are virtually no new vehicles for sale under $20,000,” Drury said. “Buyers who used to have options at the bottom of the market no longer do.”
Car manufacturers have shifted focus toward higher income customers who remain insulated from economic disruptions, said Sean Tucker, a managing editor at Kelley Blue Book.
“In 2017, [automakers] built 36 models priced at $25,000 or under,” Tucker said. “Today? Four.”
Over 43 percent of new vehicles are now bought by households making $150,000 or more annually.
“That’s a record figure,” Tucker said. “Automakers are serving that market.”
Yet lower income borrowers bear the heaviest load. Those earning under roughly $35,000 per year pay an average of $738 monthly, higher than the overall average. These borrowers also carry balances nearly $4,000 greater than households earning above $175,000.
The percentage of buyers accepting monthly payments of $1,000 or more climbed to 20 percent of all financed new vehicle purchases in the first quarter of 2026, rising from 17 percent a year prior.
“That extra money has to come from somewhere, which could be groceries, rent, savings, the emergency fund,” Drury said.
Elevated interest rates worsen the squeeze. The average APR for new car purchases reached 6.9 percent in the first quarter of 2026. Consumers with credit scores below 580 face rates above 18 percent, potentially adding $14,000 in interest alone on a $30,000 vehicle over six years.
Loan terms have also stretched to unprecedented lengths. More than 22 percent of financed new car purchases at the beginning of 2026 carried terms of seven years or longer.
“The longer these loans stretch, the harder it is to ever get out from under them,” Drury said.
José Niño is the deputy editor of Headline USA. Follow him at x.com/JoseAlNino
