The average American car payment is now $680 a month - and millions can't keep up | Fortune

"Roughly one in four Americans are paying off auto debt, according to a report published Wednesday by the Century Foundation, a progressive think tank, and are overall on the hook for a record $1.68 trillion in car loans or outstanding payments. Those figures out auto loans on par with all outstanding federal student loan debt($1.69 trillion of federal debt and $1.84 trillion total) and ahead of credit card balances ($1.28 trillion outstanding as of last year)."

"It's the end result of years of rising prices for cars, an item that has fast outpaced inflation since the pandemic. In a country as car-reliant as the U.S., expensive cars and auto debt have quickly spiraled into one of the largest monthly obligations in household budgets. The average monthly payment on a car is now around $680, according to the report, up almost 40% from 2018, when drivers could expect to pay $506."

"The numbers are especially painful for lower-income households who have to spread payments out over longer periods, significantly raising the total cost of a loan. For the average borrower paying off a car loan longer than seven years, their payments add up to nearly 20% of their average monthly income for the lifetime of their loan."

""Historically high auto costs and interest rates are pushing record numbers of borrowers into longer term loans that raise the total costs of owning a car and keep households in debt," the report's authors wrote."

About one in four Americans are paying off auto debt, with total outstanding car loans and payments reaching $1.68 trillion. Auto debt is comparable to federal student loan debt and larger than credit card balances. Rising car prices since the pandemic have outpaced inflation, increasing the size of monthly obligations in household budgets. The average monthly car payment is about $680, up nearly 40% from 2018, with some estimates as high as $760. Lower-income households often extend loan terms, which increases total loan costs. For borrowers paying off car loans longer than seven years, lifetime payments can reach nearly 20% of average monthly income.

Read at Fortune