New car loans longer than ever before
The national average for car loans just keeps growing in the US, not just in terms of their length but also the amount being financed. That trend shows no signs of abating based on the latest figures from Experian Automotive, and the statistics show auto debt reaching another all-time high.
According to the agency, the average loan term for a new or used vehicle increased in the first quarter of 2015 to new highs of 67 months (new) and 62 months (used). Loans lasting 73 to 84 months accounted for 29.5 percent of newly purchased cars, the largest figure since Experian began collecting this information in 2006.
Leasing also reached a new peak by representing 31.4 percent of new vehicle purchases. Average payments fell slightly, though, to $405 a month, versus $412 in Q1 2014.
As you might expect with such long loan lengths, the amount being financed has crept up, as well. For the quarter, the average total was $28,711, versus to $27,612 in the first quarter of 2014. Monthly car payments also grew to an average of $488, compared to $474 last year.
As in previous reports, Experian doesn't necessarily see this growing debt as a problem. "Most longer-term loans help consumers keep monthly payments manageable, while allowing them to purchase the vehicles they need without having to break the bank," Melinda Zabritski, Experian's senior director of automotive finance, said in the announcement of the Q1 figures.
The trend towards longer loans has been building for the last several years and has regularly reached new highs. In large part, it has been sustained because buyers have been keeping up with payments.
(AutoBlog.com)
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