As the US economy starts to strengthen and the jobs market picks up, so has the country’s appetite for buying cars.
New vehicle sales hit double-digit growth in September 2015, 10.2% higher than the same month the previous year, representing the strongest selling rate of any month in more than a decade.
“People shop for vehicles largely based on monthly price, and right now, average dollar amounts for new vehicle loans are soaring,” said Melinda Zabritski, Senior Director of Automotive Credit for Experian Automotive. “In order to stay within their budget goals, we have seen that more consumers — even those within the prime and super-prime risk categories — are turning to leasing and used vehicles as cost effective alternatives to buying new.” Additionally, used vehicle loans accounted for 62.8% of all vehicle financing, with the average amount financed for a used vehicle coming out to $18,850. The average monthly payment for a used vehicle, according to Experian Automotive, was $359, with a payment gap between new and used widening to an all-time high of $134 in the fourth quarter.
Steven Szakaly, NADA’s Chief Economist, said: “More than 17.7 million new light vehicles will be purchased or leased this year, about a 2% increase from 2015, and setting back-to-back records. It will be the seventh consecutive year of auto sales growth.”
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