Average Monthly Auto Loan Payments Reach a New High of $523
Consumers are spending more money per month for new vehicles than ever before, all while extending the length of their automotive loans
Earlier this month, The News Wheel reported that the number of 96-month auto loans was on the rise. As such, you might predict that consumers are spending less on monthly new car payments.
Nothing could be further from the truth. Instead, monthly car payments hit an all-time high during the first quarter of 2018.
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According to analysts at Experian, consumers are now spending an average of $523 per month to pay for new vehicles. This monthly loan payment amount is $15 more than a year ago, when the average monthly loan payment was $508.
Furthermore, while longer automotive loans are becoming more commonplace, the average auto loan was found to last approximately 69 months. In all, consumers borrowed an average of $31,453 to pay for new cars, trucks, and SUVs.
One reason for an increase in monthly car payments is a recent rise in interest rates. The average interest rate for a new vehicle loan during the first quarter of 2018 was 5.17%, up by 31 basis points when compared to a year prior.
Loans are also being issued at a far lower rate to subprime and deep subprime consumers. The number of loans issued to subprime consumers fell by 8.4%, while the number of loans issued to deep subprime loaners decreased by 14.1%.
The same Experian report found that 30-day delinquencies made up 1.86% of auto loans during the first quarter of the year. 60-day delinquencies made up 0.66% of loans during that same period.
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To come up with this data, Experian calculated auto loan payments and amounts during the first quarter of the year by analyzing more than 4.7 million auto loans.
With new car prices set to become even more expensive in the near future, consumers will either have to pay even more per month on auto loans, or instead extend those auto loans even further if they wish to finance a brand-new vehicle.
News Source: CNBC