$1,000 Car Payments Are Becoming More Common

LOS ANGELES – Four-figure monthly car payments were once rare. But with rising car prices, high interest rates, and longer loan terms, $1,000 auto payments are becoming a reality for millions of Americans.

A new LendingTree report found that 8.6% of Americans with active auto loans or leases had at least one $1,000 monthly payment in the first quarter of 2025. That’s already a significant chunk of borrowers—and 40.3% of those high-dollar loans were originated in 2024 alone, suggesting the trend is accelerating.

Where are $1,000 car payments most common?

By the numbers:

According to LendingTree’s analysis, these are the 10 states where the highest percentage of auto loan holders are making at least one $1,000 monthly car payment:

1. Texas – 12.8%
2. Nevada – 11.9%
3. Wyoming – 11.6%
4. Georgia – 11.6%
5. California – 11.3%
6. Florida – 11.3%
7. Alaska – 10.7%
8. Arizona – 10.5%
9. New Mexico – 10.4%
10. Washington – 10.3%

Most of these states have large geographic areas where personal vehicles are essential for everyday life—and in some, high incomes or expensive vehicles may also play a role in driving up loan amounts.

Experts say it’s not just about vehicle prices. Income, cost of living, and local transportation needs all factor in. In larger, more spread-out states like Texas and New Mexico, residents may rely more heavily on personal vehicles and be more likely to finance large purchases like trucks or SUVs.

Who’s most likely to pay $1,000 a month for a car?

Dig deeper:

While younger drivers are less likely to carry four-figure loans, middle-aged borrowers—especially Gen Xers—are leading the charge.

• 10.8% of Gen Xers (ages 45–60) with auto loans make at least one $1,000 payment.
• They’re followed by baby boomers (8.6%) and millennials (8.0%).
• Gen Z (ages 18–28) is far less likely to have such a loan—just 3.2% do.

Higher income and stronger credit scores are major factors. Gen Xers are often in their peak earning years, with more credit history and better odds of approval for larger loan amounts. But credit quality plays a role across the board.

Borrowers with super-prime credit scores (720 and above) are the most likely to carry four-digit car payments, with 10.4% doing so. In contrast, only 5.2% of deep subprime borrowers (scores below 580) have such loans—likely because of stricter lending limits or unaffordable interest rates.

Whether driven by preference, necessity, or inflation, the growing number of four-digit auto loans reflects broader challenges in affordability. Even if buyers can technically qualify for a large loan, it doesn’t always mean they can easily handle the monthly burden—especially if other costs rise.

What you can do:

LendingTree offers a few suggestions for avoiding sky-high car payments:

• Improve your credit score before shopping for a car to access better loan terms.
• Use calculators to understand what payment fits your budget, factoring in interest rates and loan length.
• Make a down payment—even a small one can reduce monthly costs.
• Shop around for loan offers and get preapproved before stepping into a dealership.

The message: control what you can, and don’t let the excitement of a new car overwhelm your long-term finances.