Americans now spend $717 billion annually on auto loans and auto insurance, according to new reports.
Households with car-related bills pay a median of $575 per month, or nearly $7,000 per year.
High interest rates, rising vehicle costs, and double-digit jumps in insurance premiums are driving expenses higher.
The cost of owning a car in the United States has reached new heights, with Americans collectively spending $717 billion annually on auto loans and auto insurance, according to two new reports released by doxo. The findings underscore the mounting financial burden of car ownership as households grapple with rising interest rates, higher vehicle prices, and escalating insurance premiums.
The 2025 U.S. Auto Loan Market Size and Household Spending Report estimates the auto loan market at $478 billion per year. Roughly 61% of U.S. households carry auto loan payments, with a median bill of $470 per month, or $5,640 annually. Auto loan payments now make up about 9% of household bill pay expenses, highlighting the strain many drivers feel as borrowing costs remain elevated.
Auto insurance
The companion 2025 U.S. Auto Insurance Market Size and Household Spending Report pegs annual spending on auto insurance at $239 billion. About 80% of households pay for coverage, with a typical bill of $105 per month, or $1,260 annually. These premiums account for 2% of household expenses—but they’re climbing fast. Premiums for full coverage are up 12% in 2025 compared to last year, reflecting industry-wide price pressures.
When combined, households with auto loans and insurance spend a median of $575 per month, or $6,900 annually, a significant share of the average family’s budget. Auto loan debt has ballooned to $1.66 trillion, up $13 billion from recent quarters, showing how deeply the costs of financing vehicles have become entrenched.
“The financial burden of car ownership has reached a tipping point for many American families,” said Jaimie Sheridan, Head of INSIGHTS at doxo. “With inflation, high interest rates, and rising insurance costs, consumers are forced to be more strategic—whether timing a purchase, financing, or shopping for insurance.”
Where it’s most expensive to own a car
Where you live also makes a difference. The reports also highlight geographic differences in the cost of ownership:
Nevada tops the list of most expensive states, with households paying a median of $682 per month on auto loans and insurance combined.
New Jersey and Maryland follow closely, each averaging $650 monthly.
Massachusetts, Hawaii, and Florida also rank among the top five.
At the city level, New York City drivers face the steepest costs, with a combined median monthly bill of $789. Tucson, Arizona comes next at $756, followed by Birmingham, Alabama ($727) and Memphis, Tennessee ($699). Major metro areas like Boston, Seattle, Los Angeles, and Chicago also land on the top 10 most expensive list.
The doxo reports highlight how auto-related bills—once manageable for many households—are becoming a financial pressure point. With car ownership consuming nearly $7,000 per year for the typical household, experts warn that more Americans may delay vehicle purchases, hold on to cars longer, or aggressively shop for lower insurance rates.