Most Americans regard a car payment — either for an auto loan or a lease — as a certainty in life, like death and taxes. This is in part because the auto loan rates have been relatively cheap until recently, and in part because cars are a necessity for most Americans, and most Americans can’t afford to buy a new car in cash. Thus: loans, the average payment on which for new cars was around $400 in the 2010s, according to Bloomberg. That number, now, is a whopping $777, Bloomberg says.
Meanwhile, the corresponding average payment for used cars is $544. The reasons are pretty obvious: Automakers have mostly bailed on cheap cars, because they make more money selling expensive cars, and also, various parts shortages have squeezed new car inventories, putting pressure on the used market to make up for it, and driving up prices there. Interest rates are also higher these days. Plus, there is a pent-up demand, so the situation likely won’t be changing any time soon. Add in that automakers are attempting to not carry so much inventory anyway, so thus they don’t offer discounts to move it. And, yes, EVs (for now) are slightly more expensive than the cars they’re replacing.
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