Car Payments Hit a Record High

Experian’s State of the Automotive Finance Market Report estimated that the average new vehicle loan reached a record $31,455 in the first quarter of 2018. The monthly new vehicle payment rose to $523 while the average interest rate climbed 31 basis points year-over-year to 5.17 percent. “The average American can’t afford a new car,” said Experian’s Melinda Zabritski at an event hosted by the American Financial Services Association (AFSA) and the National Association of Consumer Credit Administrators. “To reverse the trend, dealers and lenders need to better understand…data and explore different options to make new vehicle ownership accessible and appealing,” she said. “Traditionally, lenders’ risk tolerance has swung back and forth like a pendulum, and right now we’re seeing a more risk-averse side. But if payments continue to improve, we could see credit standards loosen.”

Experian (06/11/18) Matt Tatham

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