MARANA, Arizona. — The average new car payment in the U.S. has climbed to a record $787 a month. Meanwhile, Arizona remains one of the states that does not require high school students to take a personal finance course.
Live The Dream Media co-founder David Samorano laid out the numbers on the Nov. 9 episode of The David Samorano Show. He said the two trends are connected. He called on Arizona lawmakers and educators to make personal finance a graduation requirement.
“You can’t vote out bad habits,” Samorano said. “You can’t vote out the decisions you make at a car lot.”
Car debt at record levels
Citing data from Edmunds and Experian, Samorano said the average new car payment has risen from about $500 in 2016 to $787 in the third quarter of 2026.
By the numbers:
- $44,664: average amount financed on a new car in Q3 2026, a record, up from $29,880 in 2016
- 21.2%: share of new car buyers paying $1,000 or more a month, up from 19.1% a year earlier
- 25.5%: share of new car loans running 84 months or longer
- $582: average monthly payment on a used car
- $1.71 trillion: total U.S. auto loan debt, a record, up from $1.16 trillion at the end of 2016
Interest rates have held roughly flat, Samorano said, citing Edmunds. Payments are rising because buyers are borrowing more and stretching loans longer.
Underwater before the first payment
Most owners trade in their vehicles around the six-year mark, Samorano said. With seven-year loans, many still owe more than the car is worth at that point. Dealers often roll that negative equity into the next loan.
“Buyers start the new car already underwater,” he said.
Samorano also showed what the payment could become if it were invested. A $787 payment over 72 months totals about $56,700. Invested at an assumed 8% annual return, the same monthly amount could grow to about $144,000 in 10 years, he said, though returns are not guaranteed.
Paychecks haven’t kept up
Samorano said overall prices are up about 40% since 2016. Household income grew by about the same amount from 2016 to 2024, leaving many families running in place.
Housing has outpaced both. The median existing-home price rose from $234,200 in September 2016 to $417,500 in September 2026, a 78% increase.
Households are also saving less and borrowing more. Samorano said the personal saving rate fell to 2.6% in April 2026, the lowest since 2022, before recovering to about 4.1% in August. Credit card debt has grown from $779 billion in 2016 to $1.26 trillion. A 2026 LendingTree survey found 29% of buy now, pay later users had used the service for groceries.
“When people are financing groceries in four payments, that’s not a budgeting tool,” Samorano said. “That’s a warning light.”
Arizona’s gap
Samorano said 30 states now require students to learn personal finance before graduation. Arizona requires a half-credit economics course that includes financial literacy, but no stand-alone personal finance class.
He said he was taught in high school to list a car payment as a normal monthly bill. “Right out of the gate, I’m already getting taught to just accept debt,” he said.
Samorano asked listeners whether Arizona should require the course even if it means one fewer elective. He said he will keep pressing the issue on the show.
What experts advise
Samorano pointed to guidance from personal finance authors Dave Ramsey and Anthony O’Neal:
- Build an emergency fund before buying a car.
- Buy used, ideally about three years old, and pay cash.
- Keep the total value of vehicles under half of annual household income.
- If financing, keep loans to 36 months and payments under 15% of take-home pay.
- Don’t roll negative equity into a new loan.
- At the dealership, negotiate the total price, not the monthly payment.
The David Samorano Show airs live Mondays and Fridays at 8 a.m. Arizona time on the Live The Dream Media Streamverse Network and the free Live The Dream Media app.