If you’ve bought a new car or truck recently, you know the cost is rising.
New data shows monthly auto loan payments are higher than ever, with a growing number of people borrowing at least $50,000 to buy a new vehicle.
America’s growing love affair with bigger trucks SUVs and crossovers means consumers are now buying more vehicles with higher sticker prices.
That means borrowing more and spending more each month repaying those loans.
In the third quarter, the average auto loan hit a record of just under $31,000, with the average monthly payment for a new vehicle climbing to an all-time high of $530, and the average used vehicle loan payment also hit a record at $381.
Melinda Zabritski. Experian Senior Director: “If you have been out of the market for 5 or 6 years then these numbers can be surprising but for the average consumer who seems to come back to the market every 35, 36 months they are still a little higher than what they saw previously and they are certainly not going to go down.”
One reason car prices stay high is because demand remains robust. Auto sales are on pace to top 17 million vehicles for a fourth straight year. The best stretch of sales ever in the U.S.
Especially for hot models, like pickups and SUVs with the latest features and technology.
Experian says one out of five borrowers is now taking out a loan for at least $50,000.
Melinda Zabritski, Experian Senior Director: “they don’t represent a huge portion of the market, but they definitely are the area where we are seeing the most growth.
Who is borrowing fifty or sixty thousand dollars for a new vehicle?
Those with prime and super prime credit ratings, the high end of the credit market which is a growing part of the auto loan industry.
This high credit market allows automakers to charge higher prices.