By Nathalie Voit
The average new-vehicle loan shot up to a record $40,290 during the year’s second quarter, Experian said in a new report published on Aug. 25.
Experian’s “State of the Automotive Finance Market” report shows consumers shelling out $667 a month on average to finance a new car, up almost 15% from a year earlier. Compared to Q1 2022, the average monthly payment for a new vehicle loan rose by $85.
Overall, the average amount borrowed to buy a new car surged 13.2% from one year ago, Experian said.
The term of the average new vehicle loan stayed flat in Q2 at just over 69 months.
The credit monitoring firm also said that used vehicle loans rose faster than new car loans.
According to the automotive finance market report, used vehicle loans advanced 18.7% over the year to $28,534 in the second quarter. The average monthly payment for a used automobile also increased by 17% to $515 in Q2.
Experian’s Senior Director of Automotive Financial Solutions Melinda Zabritski said the higher borrowing costs for used cars stem from increased demand for used vehicles as new-automobile prices continue to rise.
“Between the inventory shortage and rising vehicle costs, consumers are looking to make the most cost-effective decision, which is often a used vehicle,” Zabritski wrote in the report.
The shift in demand is evident in the loan data.
Used vehicles accounted for 61.8% of all vehicle loans in Q2, up from 58.5% one year earlier.
At the same time, the average cost of a new car or truck reached $46,259 in August, the highest on record, data released last week by J.D. Power showed. The auto market research firm said new-vehicle prices are 11.5% higher year-over-year.
