YOUNG GENERATIONS ARE STRESSED OUT: MONTHLY CAR PAYMENTS EXCEED THEIR HOUSING COSTS

Between April and June, a record-high 17.1% of Americans who took out a loan to buy a new vehicle were strapped with a monthly payment of $1,000 or more, according to new data from Edmunds compiling hundreds of thousands of transactions each month from dealerships across the US. This figure was up from 16.8% in the first quarter of this year and 4.3% in 2019. In Texas and Wyoming, over 25% of car buyers took on payments of $1,000 or more in the second quarter.

Last year, the median monthly rent payment in the US was roughly $1,000 , according to the Federal Reserve. For some Americans, their car payment has surpassed housing as their largest monthly expense.

One of them is Nikita Sherbina, a 25-year-old in Seattle who works in the software industry. His $1,200-a-month car payment exceeds his $900 rent for his one-bedroom apartment, according to documents viewed by Insider.

Sherbina told Insider that in 2021, he purchased a Corolla 1852 four-door LE sedan to use for his daily commute and travel. He said the car was an upgrade from his previous vehicle and came with a higher monthly payment.

In a release, Ivan Drury, Edmunds’ director of insights, said a combination of high prices and interest rates had driven the increase in US car payments.

“The double whammy of relentlessly high vehicle pricing and daunting borrowing costs is presenting significant challenges for shoppers in today’s car market,” he said.

Sherbina said managing his high monthly car bill -in addition to his other living expenses-  could be stressful.

“You always want to have a steady income to manage those payments,” he said. “If everything goes well at the company, then I have no reason to be stressed. But if not, then you definitely don’t want to pay over those payments without income.”

In 2022, the median US mortgage payment was roughly $1,400 . But even some homeowners are spending more on their cars than housing.