Americans Borrowing Over $27,000 On Average For Car Purchases

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Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

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, Automotive Editor - March 9, 2018

New car prices are getting higher, but auto loan rates remain relatively low, which is obviously a bad recipe. As CNBC reports, citing Experian Automotive, the average amount of money an American driver borrows to purchase a vehicle exceeded $27,000 for the first time.

“It's not surprising buyers are borrowing more,” said Melinda Zabritski, Experian's senior director of automotive credit. “If you look at the most popular segments, they are full-size pickups and SUVs. It's hard to find one of those models new and fully loaded for under $30,000.”

The outlet claims that the average auto loan in America was $27,430 for vehicles purchased in the fourth quarter of 2013. That figure represents an increase of $739 from the same period of time from 2012. Used car loans also rose, with the average loan for an old vehicle averaging in at $17,974 – an increase of $345.

Alarmingly, American buyers with non-prime credit ratings, which CNBC claims is a credit score between 620 and 679, are borrowing the most amount of money. Individuals that fit into the category borrow $1,500 more than other buyers, as the average new car loan was at $29,385 for that demographic.

Monthly payments for new vehicles are rising alongside the average price of a new car purchase. CNBC reports that the average monthly payment for a new car increased by $11 to $471 in the fourth quarter, while the monthly payment for a used vehicle also rose by $4 to $352.

Once again, American buyers with subprime credit ratings had the highest average monthly payment of $499.

“I expect that monthly payment to continue rising and go above $500,” said Zabritski. “There's always a tipping point where buyers say, ‘I can't pay that much every month.' So far, we haven't seen the flashing lights go off indicating buyers are a tipping point.”

, Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

Follow On: Twitter | Website

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