The average loan term, average monthly payment and average amount financed for a new light-vehicle hit record highs in the first quarter, signaling U.S. consumers continue to extend themselves to afford pricier cars, Experian Automotive reported today.
Lease penetration also hit a record high in the same period in another sign consumers are willing to leverage their spending power to afford more expensive vehicles.
"As the cost of purchasing a new vehicle continues to rise, consumers clearly are stretching the loan term to help lower monthly payments, keeping them at a manageable level," Melinda Zabritski, senior director of automotive credit for Experian Automotive, said in a statement.
By the numbers
Experian Automotive said the average new-vehicle loan term reached 66 months in the first three months of the year, up from 65 months a year earlier. And the average used-vehicle loan term was 61 months, up from 60 months in the first quarter of 2013.
The average monthly new-vehicle payment was $474 in the first quarter, up 3.3 percent from a year ago. The average monthly used-vehicle payment was $352, up 1.1 percent, Experian Automotive said.
Also in the first quarter, the average amount financed on a new-vehicle loan was $27,612, an increase of $964, or 3.6 percent. For used vehicles, the average amount financed was $17,927, up $395 or 2.3 percent.
At the same time, Experian Automotive said leasing hit a record 25.6 percent of all new-vehicle sales volume in the first quarter, up from a previous high of 24.2 percent in the fourth quarter of 2013. It was the first time leasing topped 25 percent of new-vehicle sales volume since Experian began tracking it in 2006. In the first quarter of 2013, leasing accounted for 24.2 percent of all new-vehicle sales.
The average monthly, new-vehicle lease payment was $412 in the first quarter, down slightly from $414 a year earlier, which also helps explain the growing attractiveness of leasing.
"Over the last several quarters," Zabritski said, "leasing has come back as a very desirable option for consumers."
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