![\"Ravi](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/01\/ravi-stephens-with-car.jpg\")
<\/p>\n\n Melissa Dickerson never imagined she would end up with a $1,100 monthly car payment, especially for a used car. Then her son wrecked her Acura.\n <\/p>\n
\n Fortunately, he was OK. But when she went shopping for a replacement SUV, Dickerson, a paralegal from Orting, Washington, soon discovered it was going to cost her far more than the $400 a month she had been paying.\n <\/p>\n
\n \u201cIt was quite a shock,\u201d said Dickerson, who also had to extend the loan to 72 months, or six years. \u201cWhen I heard my interest rate was going to be 15%, I almost crapped my pants.\u201d\n <\/p>\n
\n The high monthly car payments \u2014 coupled with other changes in her household budget, including higher rent \u2014 caused Dickerson to fall deep into debt.\n <\/p>\n
\n \u201cNow I\u2019m relying on the credit cards to live, to pay for things that I can\u2019t pay now,\u201d she said. \u201cFood and stuff you need \u2014 the electric bill, phone bill. You think you\u2019ll be able to pay them off next month and then you can\u2019t.\u201d\n <\/p>\n
\n Record-high car prices coupled with high interest rates are leading to huge monthly car payments for many Americans. A record share of Americans \u2014 more than 20% \u2014 agreed to pay more than $1,000 per month for a new car loan at the end of the year, according to car sales site Edmunds.\n <\/p>\n
\n High monthly car payments are putting tremendous stress on household budgets already struggling to deal with a higher cost of living. But many Americans need a car for everyday use, like commuting to work and grocery shopping.\n <\/p>\n
\n \u201cRegardless of economic conditions like inflation, if somebody needs a car they\u2019re going to go out and get a car,\u201d said Satyan Merchant, leader of TransUnion\u2019s automotive and mortgage business. \u201cThey\u2019re going to spend so the payments are going to stay elevated.\u201d\n <\/p>\n
\n The average used car loan payment is $538 a month, according to TransUnion, which nearly equals the average payment on a new car in 2019. Meanwhile, the average new car payment has increased by $300, or more than 35%, since then to $769.\n <\/p>\n
<\/p>\n
\n Ravi Stephens II paid $80,000 in 2022 for a Ram 2500 pickup, which he planned to use in a business he was starting.\n <\/p>\n
\n The $1,019-a-month, seven-year loan he took out was more than double his previous car loan for a 2013 Camero. It didn\u2019t cause him too much trouble at first.\n <\/p>\n
\n \u201cI was confident that I could handle the loan, but unfortunately things took a turn,\u201d said Stephens, who lives in Aurora, Colorado. \u201cMaybe about a year ago, it started to be a bit more of a burden. So I was having to come up with a bit more money outside my job in order to sustain it. As you know, the last few years have been tough for a lot of Americans.\u201d\n <\/p>\n
\n Dickerson and Stephens are both current on their car loans and working with National Debt Relief<\/a> to reduce their credit card balances. Typically, car loans are the last thing that Americans are late to pay out of fear their vehicle could be repossessed.\n <\/p>\n \n But as costs rise across the board, a record percentage of borrowers are falling behind on payments.\n <\/p>\n \n Car loans falling 60 days or more delinquent hit 1.45% in the third quarter, according to TransUnion. That may not sound like much, but it\u2019s nearly 40% higher than just three years ago.\n <\/p>\n \n Experts say there\u2019s little chance payments will fall any time soon.\n <\/p>\n \n Average car prices, currently around a record $50,000<\/a>, will likely stay elevated<\/a>. Automakers are dealing with rising costs from tariffs on imported cars and parts, as well as the cutting of production on cheaper models.\n <\/p>\n