Consumer Title Resource | Since 2009!

$1000 Car Payments Are The New Normal

High Car Payments: A New Norm?
You can sleep in your car but you can’t drive your house — why would somebody pay a thousand dollars a month for a car payment? Do you have a thousand dollar car payment? Let us know in the comments what you think about a thousand dollars a month for a car payment.

Rising Costs and Long-Term Loans
According to Axios, thousand dollar car payments are very common now. Car payments look like mortgage payments. Well, that’s not true. They look like what mortgage payments used to look like. Now, mortgage payments are three thousand dollars, not one thousand, because the interest rates and the prices are higher.

Increasing Percentage of High Payments
According to the article, twelve percent of buyers who finance their new vehicles in June have payments of at least a thousand dollars. That’s up from seven percent in ’21 and 4.6 percent in 2019. Look, that’s double just in two and a half or three years. And we’re talking about long-term loans — 36 percent of borrowers had loans 73 to 84 months. That’s six, seven years. Gone are the days of three or four-year car loans because new car vehicle prices are averaging forty-seven thousand dollars.

Understanding the Math Behind High Payments
So why are car payments that high? How do you get to a thousand dollars a month? Well, it’s not that hard. If you want to calculate the payment on a motor vehicle, use the number two. Use a factor of two. What does that mean? Whatever you’re borrowing, whatever the car cost, multiply that number times two, and that’s your car payment. So if you have a fifty thousand dollar car, times two is a hundred thousand. Take the first four numbers — that’s a thousand. That’s it. You can figure out a car payment on any car very quickly.

Considerations on Affordability
Now, that’s figuring about a five percent interest rate on a five-year loan. So if you’re doing longer terms, the payment might be a little lower, or if the interest rate’s higher, might be a little higher. But the easy way to make a car payment is times two. Just multiply times two.

Moral and Financial Questions
So a thousand dollars a month really isn’t that surprising if cars are fifty grand. A fifty thousand dollar car is gonna have a thousand dollar car payment for five years. The question is, now that’s just the math part, that’s not the right or wrong part. The question is, is that right or wrong? Should you be spending a thousand dollars a month on a car payment?

Comparing Costs: Car vs. Home
Well, in order to have a thousand dollars take home, you probably need to make 1400 before taxes a month just for that car payment. Right? That’s 350 a week just for your car payment. That doesn’t account for insurance, gas, taxes, any other things that go into it. For most people, by the time you add up all the expenses for a new car, you could be talking two grand a month by the time you figure insurance, taxes, and gas for that car, or close to it. It’s a lot of money.

Shift in Economic Reality
How does that compare to a mortgage? Well, a mortgage payment on a house in 2017, an average house was two hundred, two hundred and fifty thousand with a three percent mortgage, you could be a thousand dollars a month for a house a few years ago. Now, you’re probably going to be twenty-five hundred a month for a house. But in three short years, four short years, a thousand dollars went from buying you a house to live in to a car. That’s a significant difference.

Financial Strategy: Old vs. New Cars
What does that mean? Well, if you have an older car that has no car payment, you’re saving a lot of money. You might be saving fifteen, twenty thousand a year. You might have to spend a little more on maintenance, but as long as it’s a pretty reliable car, may not be the worst thing in the world. What about if you have a car with an existing payment that’s three hundred or four hundred or five hundred? You might want to hang on to that car because when you trade it in to get a new car, you could be facing a thousand dollars.

Engagement and Feedback
What are your thoughts? We’d love to hear your comments about what is your reaction to seeing a thousand dollars a month. Have you shopped for a car lately? Have you seen thousand dollar car payments? You know, it used to be that you saw ads on TV and in the newspaper for car dealers advertising no money down, one ninety-nine a month, no money down, two hundred a month, whatever for a car. Those days are gone.

Market Realities and Consumer Accessibility
And they would have thousands, hundreds of cars on the lot. Now there’s not cars in a lot. What most people say is that although there appears to be a steady stream of affluent consumers, most consumers, the new car market is growing increasingly out of reach for most consumers. The new car market is out of reach. Same thing with houses. Who would have thought that a new car was out of reach for most consumers? That means used cars are the wave of the future. Maybe electric cars.

Visit Our YouTube Channel: For more insights and discussions on various topics, consider subscribing to our YouTube channel.
Click the link:

Have Title Questions? Talk to a Car Title Expert.

Book a consultation with a Car Title Expert from to get personalized guidance on your title recovery journey.

Don’t let uncertainty hold you back. If it’s your car, you deserve a title.

Share this article!

Check Your VIN Instantly:

Powered by