New car loan amounts, monthly payments set record highs
The average amount financed and average monthly payment for a new vehicle rose to record highs in the fourth quarter of 2015, said Experian Automotive. The average amount financed for a new vehicle was $29,551, up $1,170 from Q4 2014, and the average monthly payment increased to $493 from $482.
People shop for vehicles largely based on monthly price, and right now, average dollar amounts for new vehicle loans are soaring, said Melinda Zabritski, Experianês senior director of automotive credit. To stay within their budget goals, more consumers are turning to leasing and used vehicles as cost-effective alternatives to buying new.
The average lease payment for Q4 2015 was $412 (versus the average loan payment of $493). So itês not surprising that leasing reached another record high of 33.6 percent of all new financing.
Used vehicle loans made up 62.8% of all vehicle financing, and the average amount financed for a used vehicle was $18,850. The average monthly payment for a used vehicle was $359, bringing the gap between new and used vehicle monthly payments to a record high of $134.
Credit scores are flattening out for new vehicle financing, and more prime customers are shifting to used, which is increasing the average used score.
Other findings from the study:
« Reliance on financing continues to grow 85.9% of all new vehicles and 54.7% of all used vehicles were financed.
« The average interest rate for a new vehicle loan was 4.63%, versus 8.78% for used.
« Average loan terms for new and used vehicles held steady at 67 months and 63 months, respectively.
« Loans of 73 to 84 months grew to 29% for new vehicles, and 16.4% for used.Download Bulletin PDF