It appears that many auto buyers are taking out longer, record-setting loan terms – some as long as 96 months. However, even with the longer loan terms, this hasn’t stopped the average monthly payment amount from rising. In fact, a typical loan payment for a new vehicle hit $523 a month.
The news comes from Experian, which reported in the first 2018 quarter that the average monthly loan payment increased by $15 from a year earlier. A big reason for the increase is consumers’ interest in buying crossover vehicles and SUVs.
The company looked at the first three months of new and open auto loans and found buyers of any new vehicle were paying about $31,500 – another record high. The rise in monthly payments isn’t all that shocking since the interest rates have also risen. In the first quarter alone, a new vehicle loan had a 5.17 percent interest rate.
Experian also learned that the number of 30-day delinquencies had dropped to 1.86 percent for auto loans with the loan percentage of 60-day delinquencies staying stagnant. However, 90-day delinquencies actually increased from 3.8 percent to 4.3 percent.
One as to wonder if the trend will continue and be a real problem for the economy and industry in the future.