Americans Taking Longer Than Ever to Finance Car Purchases
DETROIT -- The average length of loans for new and used vehicles in the U.S. in the first quarter hit record highs, and nearly 30 percent of new-vehicle loans have pay-back periods longer than six years, Experian Automotive said in a report issued Monday.
The average term for a first-quarter new-vehicle loan was 67 months and for used vehicles, 62 months, Experian said.
Experian found that in the first quarter, 29.5 percent of new-vehicle loans in the U.S. market were for term of 73 months to 84 months.
%VIRTUAL-pullquote-While longer term loans are growing, they do not necessarily represent an ominous sign for the market.%Experian has been tracking the length of auto loans since 2006.
"While longer term loans are growing, they do not necessarily represent an ominous sign for the market," said Melinda Zabritski, Experian's senior director of automotive finance. "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."
The average age of cars and trucks on U.S. roads is about 11 years.
The average new-vehicle loan in the first quarter this year was $28,711 in the first quarter of 2015, up from $27,612 a year earlier. The average monthly payment for new vehicles rose to $488 from $474 a year earlier, Experian reported.
Leases accounted for 31.5 percent of new vehicles financed in the first quarter, up from 30.2 percent a year earlier. The average monthly payment for a new leased vehicle fell to $405 from $412 a year earlier.