A new analysis by LendingTree shows clear generational differences in how Americans finance their vehicles, with older borrowers carrying larger balances and younger drivers devoting a higher share of their income to car payments.
The study, published Jan. 20, 2026, analyzed roughly 66,000 anonymized credit reports from LendingTree users with active auto loans between July 1 and Sept. 30, 2025. The analysis examined loan balances, monthly payments, interest rates, loan terms and estimated total interest paid across four age groups: Generation Z, millennials, Generation X and baby boomers.
According to LendingTree, Millennials and Generation X borrowers carry the highest average auto loan balances. Millennials, defined in the study as ages 29 to 44, have an average balance of $22,627. Generation X borrowers, ages 45 to 60, follow closely with an average balance of $22,514. Baby boomers, ages 61 to 79, have an average balance of $20,632, while Generation Z borrowers, ages 18 to 28, carry the lowest average balance at $20,241.
Monthly payment amounts generally reflect those balances. Generation X borrowers have the highest average monthly payment at $594, followed by millennials at $589. Baby boomers pay an average of $554 per month, while Generation Z borrowers have the lowest average payment at $522.
Despite having smaller balances, younger borrowers face higher borrowing costs. The study estimates that Generation Z borrowers have the highest average interest rate, about 13.00%, reflecting shorter credit histories and less-established credit profiles. Interest rates are lower on average for older generations, with baby boomers paying the lowest estimated rates.
When total interest paid over the life of the loan is considered, millennials rank highest, with an estimated $10,531 in interest. LendingTree attributes this to the combination of larger loan balances and longer repayment terms, even though younger borrowers often face higher rates.
Loan length also varies significantly by generation. More than half of Generation X borrowers — 53.0% — have auto loans with terms longer than 72 months, the highest share among the groups studied. Millennials are close behind, while 40.0% of Generation Z borrowers have loans exceeding 72 months, the lowest share. The analysis also found that 8.0% of millennials have loan terms longer than 84 months, slightly higher than other generations.
The report highlights differences in affordability when loan payments are measured as a share of income. Generation Z borrowers spend the largest percentage of their monthly income on car payments, an estimated 13.4%, according to LendingTree. Baby boomers devote about 11.1% of their income to auto loans. Millennials and Generation X borrowers spend smaller shares, at 7.7% and 7.1%, respectively.
Large monthly payments are most common among Generation X borrowers. The analysis shows that 9.0% of Gen X auto loan holders have at least one monthly payment of $1,000 or more. Millennials follow at 7.4%, while 5.9% of baby boomers and 3.7% of Generation Z borrowers have payments at or above that level.
LendingTree says the differences reflect broader financial realities faced by each age group. Older borrowers often have higher incomes and more established credit, allowing them to qualify for larger loans and lower interest rates. Younger borrowers, by contrast, typically earn less and have thinner credit files, which can translate into higher interest rates and a heavier financial burden relative to income.
The study notes that while millennials and Generation X borrowers carry the most auto debt in dollar terms, younger drivers may feel the strain more acutely because a larger portion of their income goes toward transportation costs. At the same time, extended loan terms across all age groups suggest that many borrowers are stretching payments to manage rising vehicle prices.
LendingTree cautions that long loan terms can increase the total cost of a vehicle, even if they reduce monthly payments. The analysis underscores the importance of understanding interest rates, loan length and total repayment costs when financing a vehicle, particularly as average vehicle prices and borrowing costs remain elevated.
Methodology for the study is based on anonymized credit data from LendingTree users with active auto loans during the third quarter of 2025. The analysis includes both new and used vehicle loans. Income estimates used to calculate the share of income devoted to auto payments are based on U.S. Census Bureau American Community Survey data, according to LendingTree.
The findings illustrate how generational differences in income, credit history and borrowing behavior shape the auto loan landscape, with no single age group immune from the financial pressures of higher vehicle costs and longer-term debt.
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