Lower Auto-Loan Rates, Payments in 4Q12 Than 4Q11

Consumers benefitted from lower auto-loan interest rates, longer loan terms, and smaller monthly payments in the final quarter of 2012 than they did in 4Q11, found new data released by Experian Automotive. 

The research showed that the average loan for new cars rose $272 to $26,691 year-over-year, while used car loans increased $239 to $17,629. Credit scores for both new and used loans have declined since the last quarter of 2009, with the average new-car score down six points to 755 year-over-year – and 20 points since 4Q09. Used-car loan credit scores dropped five points from last year to 665.

New-car financing in the subprime space increased to 24.77% in 4Q12 from 22.59% the year before, while subprime used-car financing rose to 55.4% from 53.58% in 4Q11.

Interest rates declined slightly as rates for new-car buyers dropped to 4.36% from 4.52%, and used-car rates fell to 8.48% from 8.67%. Monthly payments for new-car loans also had a modest drop to $460 from $468 the year prior, while used-car payments stayed fairly flat, falling just $1 to $348 from the final quarter of 2011. The lower payments stemmed from new-car loan terms extending to 65 months from 63 months quarter-over-quarter; used-car terms stayed flat at 60 months.