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What is the average monthly car payment?
I’m trying to decide whether I should lease or finance a new car, but I’m not sure what to expect. What do most people pay each month for their car payment on average?
Jason Tushinski · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Great question! In 2021’s last quarter, the average monthly car payment is the U.S. was $636, a jump from $614 in the third quarter. A few factors are behind this rise, most notably the global chip shortage, high demand combined with little supply, and luxury shoppers opting to finance as opposed to lease.
- Global chip shortage: In case you’ve been living in another universe, you’ll know that COVID-19 has impacted every industry, including the car industry. Stretched supply lines and a global chip shortage have resulted in delays and lower inventory, which means payment rates are going up for the cars that are in stock.
- High demand, little supply: The chip shortage plays hand-in-hand with this point—shoppers want to lease or buy, but dealers don’t have enough inventory to satiate this demand. Because of this, car makers are not offering attractive lease deals, because customers are falling over themselves to get their hands on the limited number of vehicles in stock.
- Financing over leasing: Luxury shoppers are driving this trend—opting to finance over leasing a vehicle. The lack of attractive lease offers (due to tight supply), combined with favorable interest rates make financing a luxury vehicle more appealing to buyers. For example, in 2021’s fourth quarter, 42% of BMW buyers opted to finance the vehicles, a big jump from 33% of BMW choosing financing from the same time in 2020. With more buyers financing over leasing, this plays a part in driving up monthly payments, too.
Whether you decide to lease or finance your next car, you’ll need to protect it with a robust
car insurance
policy, and you can find one by using Jerry
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- Gregory R.
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