--- title: As Auto Loan Rates Soar, the Average Car Payment Zooms Past $700 a Month description: As auto loan rates rise, the average monthly car payment for a new vehicle purchase hit a record high in the first quarter of 2023. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Loans - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Loans - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-04-04T18:05:07.000Z' modified: '2024-01-10T13:00:14.000Z' section: Loans tags: - cars - News word_count: 467 canonical: https://money.com/auto-loan-car-payment-700-month/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Cars in an auto dealership](https://img.money.com/2023/04/News-Auto-Loan-Rates-Spike.jpg) The average [auto loan interest rate](https://money.com/best-auto-loan-rates/) for a new vehicle purchase reached the highest level since 2008 in the first quarter of 2023. Combine that with expensive prices for new cars, and the average new auto payment just hit an all-time high well over $700. Car buyers who financed a new vehicle in the first few months of the year committed to an average auto loan interest rate of 7%, compared to 4.4% in the first quarter of 2022, according to a [new report from Edmunds](https://www.edmunds.com/industry/press/auto-loan-interest-rates-hit-highest-level-since-2008-and-drive-record-share-of-1000-monthly-payments-in-q1-according-to-edmunds.html). Today’s auto loan rates are one of the challenges American consumers are facing as a result of the [Federal Reserve’s interest rate hikes](https://money.com/fed-interest-rate-hike-march-2023/) over the past year as it has tried to [slow inflation down](https://money.com/february-2023-inflation-prices-climbing/). The [average price of a new car](https://money.com/average-new-car-price-drops-february/) remains extremely high at nearly $49,000, and while the Fed’s rate hikes may have put some downward pressure on car prices, higher borrowing costs have made it more difficult to afford a new car. ## What experts say The rise in auto loan rates helped push the average monthly payment for new vehicles purchased in the first quarter to $730, a record high and an increase from $656 a year ago, according to the report. However, it appears that auto loan rates may be stabilizing. Auto loan rates stayed flat at 7% in the past month, breaking a 14-month streak of nonstop increases. An increase in subsidized financing offers from automakers kept auto loan rates from rising in March, according to the report, which notes that these types of deals can go a long way right now in influencing buyers’ decisions. - “Since interest rates are at the forefront of consumers' minds, any automaker or dealer that can advertise incentives related specifically to interest rates will likely get more attention,” said Jessica Caldwell, Edmunds' company’s executive director of insights. - While there are low APR financing deals to be found for some new cars, they generally come with the tradeoff of requiring a shorter loan term, and only a subset of buyers can afford the high monthly payments that come with that. - Similarly, buyers who have the money to make a major down payment — or have a valuable car that they can trade-in when they buy — will have an easier time in the current market because they can avoid thousands of dollars in interest payments, according to the report. - This dynamic is likely one of the reasons why the average down payment on a new vehicle purchase hit a record high of $6,956 in the first quarter, a steep increase from $6,083 for the same period a year ago, according to Edmunds. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/auto-loan-car-payment-700-month/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Loans", "item": "https://money.com/loans/" }, { "@type": "ListItem", "position": 3, "name": "Auto Loans", "item": "https://money.com/auto-loans/" }, { "@type": "ListItem", "position": 4, "name": "As Auto Loan Rates Soar, the Average Car Payment Zooms Past $700 a Month" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/auto-loan-car-payment-700-month/#webpage", "url": "https://money.com/auto-loan-car-payment-700-month/", "name": "As Auto Loan Rates Soar, the Average Car Payment Zooms Past $700 a Month", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-04-04T18:05:07.000Z", "mainEntity": { "@id": "https://money.com/auto-loan-car-payment-700-month/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/auto-loan-car-payment-700-month/#breadcrumb" }, "dateModified": "2024-01-10T13:00:14.000Z" }, { "@type": "NewsArticle", "headline": "As Auto Loan Rates Soar, the Average Car Payment Zooms Past $700 a Month", "articleSection": "Loans", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/04/News-Auto-Loan-Rates-Spike.jpg", "width": 4187, "height": 2791, "caption": "News-Auto-Loan-Rates-Spike" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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