The average loan for both new and used vehicles hit all-time highs in the third quarter of 2014, according to the latest update from the credit bureau Experian.
The average loan amount for a new vehicle was $27,799 in the third quarter of 2014, up $1,080 from the previous year. Used vehicle loans increased $676, reaching $18,576 over the third quarter, surpassing the all-time high set in the second quarter of 2014.
Meanwhile, consumers are leasing vehicles at a higher rate, and taking out longer loans.
Experian found that leasing accounted for 29.1 percent of all new vehicle financing in the third quarter 2014, up 7.1 percent from a year ago.
New vehicle loans in the 73- to 84-month range grew by 23.7 percent in third quarter, compared with the previous year. Used-vehicle loans in the same range grew by 18 percent from a year ago.
“Car buyers tend to shop with a monthly payment in mind. As a result, we are continuing to see them turn to leasing and longer loan lengths as strategies to keep payments down and make vehicles more affordable,” said Melinda Zabritski, senior director of automotive finance for Experian. “As car values continue to reach new heights, these insights will help dealers, lenders and consumers become more aware of the options available to them to keep people buying cars, all while staying within their budgets.” Many have also decided to use auto lease calcuators similar to what you’d find at Swaplease (https://www.swapalease.com/lease101/auto-lease-calculator/) to make better auto related decisions for their budgets.
Experian also found that the average monthly payment for new and used vehicle loans increased from the previous year. The monthly payment for a new loan reached $470, up $12 from a year ago, while the monthly payment for a used loan reached an all-time high of $358, an increase of $8 over the same time period.
• The average credit score for a new vehicle loan was 713 in Q3 2014, down 3 points from a year ago.
• The average credit score for a used vehicle loan rose 2 points in Q3 2014, reaching 650.
• Captives were the only lender type to see an increase in market share year over year, up 28.9 percent.
• A record-high 54.1 percent of all used vehicle transactions were financed, up from 52.6 percent in Q3 2014.
• For new vehicles, 84.8 percent of all transactions were financed in Q3 2014, which was unchanged from the previous year.