The gap between new- and used-vehicle loan payments continued to widen in the first quarter, even as lease returns lift overall used-vehicle loan amounts, Experian said Thursday in its "State of the Automotive Finance Market" report.
As late-model vehicles come off lease, monthly payments on used vehicles continued to rise in the first quarter. But even with incentives tempering the gap, payment increases on new vehicles are eclipsing payment rises in the used-vehicle space, said Melinda Zabritski, Experian's senior director of automotive finance.
The monthly payment gap between new and used vehicles was $151 in the first quarter, up $6, or 4.1 percent, from a year earlier. The payment gap between new vehicles and used vehicles sold at franchised dealerships was a bit lower, at $137, because franchised dealerships sell more off-lease, late-model vehicles, Zabritski said.
"This has been a trend that has continued to grow," Zabritski told Automotive News. "Used cars cost more, but new cars seem to be outpacing that."
The gap between new and used payments widened $9 for nonprime, subprime and deep subprime borrowers. For prime and superprime borrowers, the payment gaps grew $6 and $3.