U.S. New-Car Loan Payments, Amounts at Record Highs

The average new-car loan in the U.S. climbed 3% year on year to a record high $31,500 in the first quarter of 2018, says consumer credit scoring company Experian plc.

Monthly payments for new cars also rose 3% to a record-high average of $523, making a new vehicle less attainable for the average U.S. consumer, Experian says. The company calculates the average for used-car loans in January-March was $19,500, also a record.

A 72-month loan continues as the market’s most common new-car term, although the proportion of loans written for 85-to-96 months continues to grow. Experian says the total outstanding automotive loan balance in the U.S. has grown to an all-time high of $1.1 trillion.

The proportion of late payments fell in the first quarter to about 2% for 30-day delinquencies and remains at about 1% for 60-day delinquencies. If those ratios hold, lenders may loosen credit standards and increase their level of subprime loans beyond the current 23%, Experian predicts. For now, lending to prime and super-prime customers has reached a six-year high of 73%.