An $830-a-month car payment. Auto insurance for $280 each month. Thousands more for tire and maintenance repairs.
For almost three years, those bills have followed Davine Greene, a nursing student who hasn’t missed or been late on a payment since buying her Kia K5 GT in November 2023. But keeping up with the payments has driven up her debt to more than $80,000, not including student loans.
Last week, she filed for bankruptcy to escape the burden, she said.
“This car is the bane of my existence,” said Ms. Greene, 24, who lives in Fort Lauderdale, Fla. “Probably the worst decision I’ve ever made, like, financially speaking.”
As car prices, auto loan interest rates and insurance and maintenance costs continue to rise, owning or buying a car is becoming harder to afford.
The war in Iran have pushed gas prices up, adding to greater affordability concerns. President Trump said in a recent interview with Reuters that he was willing to tolerate higher prices for strategic priorities.
Vehicle prices climbed during the pandemic as supply chain disruptions slowed production and manufacturers focused on building more profitable vehicles. In the years since, rising interest rates have made the situation even tougher on households. The average interest rate on a 60-month new car loan from banks was 7.22 percent in November, according to the Federal Reserve.
Higher rates have pushed monthly payments further. The average monthly new-car payment reached $774 in January, up from $588 in January 2021, according to Edmunds, an auto research firm. A growing share of buyers are taking on even larger loans: More than 20 percent of new-car borrowers agreed to pay over $1,000 a month at the end of last year, which was a record, Edmunds reported.
But loan payments are only part of the strain. When insurance, gas, repairs and maintenance are included, the total cost of owning a vehicle has risen more than 40 percent since January 2020, according to an index from Navy Federal Credit Union.
All of this pressure has begun to weigh on many households.
“Americans are frustrated by Whac-a-Mole inflation,” said Heather Long, chief economist at the credit union. “It’s difficult to plan and leaves middle-class and moderate-income consumers constantly on edge about what will shoot up in price next.”
As a result, more middle- to lower-income Americans are falling behind on their car payments. Auto loans that were at least 60 days delinquent reached 1.45 percent in the third quarter, nearly 28 percent higher than three years ago, according to TransUnion, one of the three major credit bureaus. Repossessions have increased. More drivers are trading in vehicles worth less than what they owe on their loans.
Interest rates would have to decline dramatically before they can meaningfully affect monthly payments, and a drop in vehicle pricing could also help, but that is not an outcome shoppers can expect based on historical precedent, said Joseph Yoon, a consumer insights analyst at Edmunds.
As car costs mount, many Americans are looking for solutions. More are stepping away from the market, taking on longer-term auto loans or dropping car insurance altogether, even though that’s illegal in the majority of states. About 53 percent of consumers said affordability was a primary reason for not considering a vehicle purchase this year, according to a recent TransUnion survey.
Uber, and Holding On to Old Cars
Angelica Akins, 32, works late night shifts as a certified nursing assistant while raising five children. Early last year, the engine of her 2011 Chevrolet Equinox died. Without enough savings or the credit score that dealerships required, she put off buying a car and temporarily turned to ride-share services to get to work.
The rides cost her around $1,000 a month, with her commute taking about two hours round-trip from her apartment in Grand Rapids, Mich., to her job in Saginaw. Ms. Akins picked up extra shifts to keep up with her expenses while saving for a car. But the daily Uber costs added up, and she managed to save only about $2,500 — less than half of what she desired.
“You never know how important things are until you lose them,” she said.
Ms. Akins recently moved back in with her mother, leaving the neighborhood and home she loved to cut back on her $1,400 monthly rent and shorten her commute to 30 minutes, making it easier to share rides in her mother’s car or find cheaper trips.
To get around high car costs, other owners, like Antoine Rhodes, a hair stylist, are holding on to aging vehicles longer. The average age of a car on the road now is nearly 13, according to Kelley Blue Book, a research firm.
For Mr. Rhodes, 34, car payments aren’t the issue, since both of his vehicles are paid off. Instead, the challenge is keeping up with gas, repairs and rising insurance costs.
After splitting time between Las Vegas and Texas, he settled in Houston in 2023. But he had hourlong work commutes and was driving for DoorDash and Uber for extra income, which quickly raised the gas bill and mileage on his 2016 Chevy Sonic. He is also holding on to a 2015 Chevy Camaro.
Mr. Rhodes has decided to pause his ride-sharing and delivery work and is focusing only on hair styling.
“I remember being younger, and you could just buy a car outright and keep it rolling,” Mr. Rhodes said. “Now there’s these high payments. It’s just crazy.”
Part of the reason rising insurance costs are hitting drivers like Mr. Rhodes is because of the steady growth in uninsured drivers. Since the pandemic, the number of people driving without coverage has jumped — to more than 15 percent in 2023 from about 11 percent in 2019, according to Insurance Research Council, a firm that calculates data based on the relative frequencies of auto-insurance claims. JD Power, which surveys consumers about insurance trends, reported a similar increase in uninsured drivers in the second half of 2025.
When drivers skip insurance, everyone else pays more. Insurers spread the risk, which pushes up premiums and leaves many households scrambling to trim costs elsewhere. And drivers who forgo insurance and have an accident could face financial ruin.
A Struggling Auto Industry
Higher car costs aren’t hitting just consumers — they are also weighing on dealerships.
Sales ticked up slightly in January but dropped more than 3 percent in February. Affordable sedans — once popular with first-time buyers — are disappearing. Companies like G.M., Ford, and Stellantis have stopped making many entry-level models, and G.M.’s dealer inventory is now about half of what it used to be.
Analysts expect U.S. auto sales to slip to around 16 million vehicles in 2026, down from 16.3 million in 2025. This is partly because of President Trump’s tariffs on new cars and parts, which have raised prices and forced automakers to rethink supply chains.
Despite these challenges, the market has held up thanks to wealthier buyers. Americans with household incomes of $150,000 or more now account for 43 percent of new car sales, up from a third of all cars sold in 2019, according to Cox Automotive, a research firm. Yet lower-income households are buying fewer vehicles, dropping to about a quarter today from over a third of sales in 2019.
“When it takes well over 30 weeks of median household income to afford the average new vehicle, personal transportation shifts from a routine household purchase to a discretionary one,” said Erin Keating, executive analyst at Cox Automotive.
When Ms. Greene, the nursing student in Florida, agreed to her $830 monthly car payment, she said the dealership had originally told her it would be about $400 a month — less than what she had been paying for her two-door Mustang. By then, she already had the keys in her hand and started imagining life with the car.
Now, as she waits for her bankruptcy to be finalized, Ms. Greene hopes to find a car with a payment of $400 or less. She doesn’t care what kind of car it is, as long as it’s affordable.
“I’m going to pretty much just go for something to get me from point A to point B,” she said.
Kailyn Rhone is a Times business reporter and the 2025 David Carr fellow.
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