SCHAUMBURG, Ill. (9/1/15)--The difference between the average monthly payment on a new car vs. a used car has reached its highest point ever, according to Experian’s recent Automotive Finance Market report.
In the second quarter, the average monthly payment on a new vehicle came in at $483, while the average payment on a used vehicle was $361. The $122 gap is the widest margin since Experian began tracking the number in 2008.
Not surprisingly, the report also found that the difference between the average car loan amount for new and used vehicles continues to expand. It said that the average financing for a new car was $28,524, compared with $18,671 for a used car--a nearly $10,000 difference.
“As the price of new vehicles continues to rise, and the gap between monthly payments for new and used vehicles widens, we see more and more consumers looking for ways to keep their vehicle payments affordable,” said Melinda Zabritski, Experian senior director of automotive finance.
“For instance, consumers are taking advantage of longer loan terms,” she added. The share of used vehicles with financing terms of between 73 and 84 months--or roughly six or seven years--rose 14.8% on a year-over-year basis in the second quarter to 16.1%, the highest percentage on record. For new vehicles, the percentage jumped by 19.7% to 28.8%.
“The availability of different financing options allows consumers to stretch their dollar and more easily find a vehicle that meets their budgetary needs,” Zabritski said. “Lenders and automotive dealers also can benefit greatly from these trends by gaining insight that will enable them to take advantage of similar market opportunities in the future.”