According to Experian's State of the Automotive Finance Market report in the second quarter of 2021, the average monthly payment for a new vehicle for a subprime borrower was $591. If you're looking for something more affordable month to month, then a used car may be the way to go.

The Average Loan Payment for a Bad Credit Auto Loan

The better your credit score, the better the interest rates you’ll be offered – which likely means a lower monthly car payment for you.

Experian, a major credit bureau, splits up borrowers into five credit scoring categories: super prime (781 to 850), prime (661 to 780), nonprime (601 to 660), subprime (501 to 600), and deep subprime (300 to 500). Typically, a borrower with a credit score below 670 is considered a bad credit borrower.

According to Experian's State of the Auto Finance Market report covering the second quarter of 2021, the average used car payment for subprime buyers was $445 a month. For new vehicles, the average monthly payment is reported as $591.

Deep subprime borrowers with credit scores below 500 have an average used car payment of $436, and an average new car payment of $553.

Keeping Your Car Payments Low

What are the Average Monthly Loan Payments for a Bad Credit Auto Loan?Because the average car payment for both new and used vehicle buyers continues to increase, most borrowers who have bad credit will most likely be more interested in buying a used car. Since used vehicles generally sell for less, it’s safe to say your monthly payment likely won’t reach the current average new car monthly payment. But, depending on your loan term, interest rate, and specific vehicle, the monthly payment could be higher than anticipated.

So, in order to keep your monthly payments cost-friendly, you’ll need to stay on top of your budget before and after you take out a new loan.

Before you sign the papers:

  • Research and plan – Look at your current finances to determine how much you’ll be able to afford each month without overextending your budget. Online tools such as our Car Loan Estimator can help you get an idea of how much you might be paying for a car loan. Lenders look at various things such as your income and monthly bills to determine your maximum allowed monthly payment.

After you sign the papers:

  • Keep making payments – Once you’ve signed the loan contract, you’ll need to keep up with your monthly payments. Things can happen, and if your financial situation changes during your loan, you should immediately contact your lender. Most lenders – especially if you've kept up on your payments – will try to help you through this type of situation. Depending on the situation, a lender may be willing to allow you to skip your current (and possibly your next) payment, and add it to the end of the loan term.

The Bottom Line

There’s no way to determine your exact monthly payment with bad credit. It all depends on your current credit and budget situation. Make sure you budget and plan ahead of time, so you don’t overextend yourself on an auto loan.

If you're struggling with credit issues and need to finance a car, it can be tough not knowing where to turn. Luckily, Auto Credit Express makes finding financing fast and easy with our network of special finance dealerships. We'll work to connect you with a local dealer if you submit our free and secure auto loan request form.