The average monthly payment for a new vehicle in the second quarter of 2015 was $483, while the average for used vehicles was $361 — widening the gap between the two to $122.
That the largest margin since Experian began publicly reporting the data in 2008.
The average transaction price for a new vehicle during the second quarter grew 2.3 percent to $32,759, according to Edmunds.com data. For used vehicles, the average transaction price rose 7.6 percent to $18,800.
Moreover, the difference between the total loan amounts for new and used vehicles also increased significantly. On average, consumers financed $28,524 for a new vehicle and $18,671 for used — a difference of $9,853.
“As the price of new vehicles continues to rise, and the gap between monthly payments for new and used vehicles widens, we see more and more consumers looking for ways to keep their vehicle payments affordable,” said Melinda Zabritski, Experian’s senior director of automotive finance. “This could be especially true for consumers who have the financial ability to pursue a new vehicle but may have sticker shock at the rising prices and don’t want the accompanying high monthly payments.”
Findings from the report also show that consumers are continuing to extend their loan terms as a way to keep payments down, especially for used vehicles. The percentage of used vehicles financed for 73 to 84 months increased by 14.8 percent from Q2 2014 to reach 16.1 percent — the highest percentage on record. Additionally, new vehicles financed for the same term length climbed 19.7 percent from the previous year to reach 28.8 percent.
Leasing Continues to Gain
During the second quarter, consumers continued to select leasing as a popular option, as 31.4 percent of all new vehicles financed were leases, up from 30.2 percent the prior year. Leasing terms also increased, with leases extending past the average of 36 months into the 37- to 48-month range increasing by 18 percent. Moreover, the average lease payment dropped $13 a month, going from $407 in Q2 2014 to $394 in Q2 2015.
“The automotive finance market continues to progress in response to consumer demand,” said Zabritski. “The availability of different financing options allows consumers to stretch their dollar and more easily find a vehicle that meets their budgetary needs. Lenders and automotive dealers also can benefit greatly from these trends by gaining insight that will enable them to take advantage of similar market opportunities in the future.”
In other findings:
• Used vehicle financing is at an all-time high of 55.5 percent, compared with 53.8 percent the prior year.
• The total percentage of new vehicles financed in Q2 reached a record high of 85.8 percent, compared with 85 percent a year earlier.
• The average credit score for a new vehicle loan dropped two points from last year to reach 709. The average credit score for a used loan increased one point to 645 over the same time period.
• During the second quarter, the average interest rate for a new vehicle loan was 4.8 percent, up from 4.6 percent in Q2 2014. The interest rate for used vehicle loans was 9.1 percent, up from 8.8 percent over the same time period.