Car prices are about to spike: Up to $8,900 more per vehicle (2026 tariff explained)
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Rising vehicle prices, auto loan interest rates, and insurance costs are making it harder for people to buy or keep cars, with the average monthly new-car payment reaching $774 in January. The total cost of owning a vehicle has risen over 40% since January 2020, leaving many households struggling to afford car payments and seeking solutions such as taking on longer-term auto loans or dropping car insurance.
Car prices are increasing due to supply chain disruptions and rising interest rates. The average monthly new-car payment has reached $774, up from $588 in January 2021. Insurance, gas, repairs, and maintenance costs have also risen, making it harder for people to afford cars. Many households are struggling to make payments, with auto loans over 60 days delinquent reaching 1.45%. Some are seeking solutions such as taking on longer-term loans or dropping car insurance. The situation is expected to continue, with no significant decline in vehicle prices or interest rates expected.
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