Temperatures might be dropping for parts of the country right now, but auto loan balances, monthly terms, and leasing all rose in the third quarter, according to a new report from Experian Automotive.
The average amount financed for a new vehicle was at $27,799 in 3Q, up $1,080 from the previous year, and average used vehicle loans increased to $18,576, up $676 over the same time period.
Experian also found that that leasing accounted for 29.1% of all new vehicle financing in 3Q, up 7.1% from a year ago, while 73-to-84 month new vehicle loans grew by 23.7% last quarter, compared with 3Q 2013. Used loans in the same range also grew, up 18% from a year ago.
“Car buyers tend to shop with a monthly payment in mind. As a result, we are continuing to see them turn to leasing and longer loan lengths as strategies to keep payments down and make vehicles more affordable,” Melinda Zabritski, senior director of automotive finance for Experian, said in a press release. “As car values continue to reach new heights, these insights will help dealers, lenders and consumers become more aware of the options available to them to keep people buying cars, all while staying within their budgets.”
Although lower payments are frequently a deciding factor for car sales, the average monthly payment also rose with new loans at a monthly average of $470, up $12 from a year ago, while used loan were at $358, an increase of $8 over the same time period: a new all-time high, according to Experian.
The report also found that the average credit score for a new vehicle loan was 713 in 3Q, down 3 points from a year ago, but the average credit score for a used vehicle loan was up 2 points, reaching 650. For new vehicles, 84.8% of all transactions were financed in 3Q, which was unchanged from the previous year, but used vehicles financed were up to 54.1%, a record high according to Experian’s finding.