As vehicle prices rise amid inflationary pressure, Americans buying new cars are taking on higher loans and pushing themselves deeper into debt, according to credit-monitoring company Experian.
Both the average loan amount and monthly payments for new and used cars have risen over the recent quarters, the firm said in an Aug. 25 news release. In second quarter 2022, the average loan amount for a new vehicle rose 13.21 percent year over year, to $40,290. During this period, monthly payments rose from $582 to $667, an increase of 14.6 percent.
For used vehicles, average loans jumped 18.66 percent, to $28,534, while the average monthly payment rose from $440 to $515.
Experian also found that consumers were shifting back to used vehicles, accounting for 61.78 percent of all vehicle financing during second quarter 2022, which is up from 58.48 percent during the year-ago period.
“Between the inventory shortage and rising vehicle costs, consumers are looking to make the most cost-effective decision, which is often a used vehicle,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions.
“The benefit of higher vehicle values is that consumers are able to get more for their trade-ins, which can help offset the increased cost of their next vehicle.”
According to market research firm J.D. Power, the average transaction price for a new vehicle is expected to hit a record high of $46,259 in August, up 11.5 percent from a year back.
The 12-month Consumer Price Index, a measure of inflation, registered an 8.5 percent increase in July, according to data from the U.S. Bureau of Labor Statistics. Prices of new vehicles rose by 10.4 percent. while used cars and trucks saw prices jump by 6.6 percent.
Which will result in a fewer number of vehicles in the used vehicle inventory. Thank God for bicycle lanes because a bicycle is all you’ll be able to afford in 10 years.
If one has the cash here on delmarva, lots of folks selling cars trucks mini vans (sale by owner). I was west of d bury the other day…near quantico and and owner had a truck and mini van for sale in his yard. 7k for the truck 6k for the mini. Not super old…prob not “perfect”. Hell 10k cash prob could get both. Better than brand new X for 30 or 40 or FIFTY K then interest. Hell many of us can or know someone who can work vehicles.
Of course one needs the cash first and thats very hard these days.
And they want EVs by 2035? BwahahahaHhaahahahahah
30 year Mortages for cars baby !!!!!! Just like a house !!!!
Electric will be Mandated by dirty Govt so they can CONTROL WHEN you drive !!!!!!
We should eliminate all credit. Save cash, pay cash. Otherwise you can’t afford it and shouldn’t buy it. But everyone wants stuff they can’t afford, because they’re shallow and foolish. Want a car? Save up for it.
1:31, not much saving going on these days. It takes two jobs just to pay rent or mortgage, food cost, health insurance, car insurance, home owners insurance, electricity, telephone, fuel for travel to work, clothing, school supplies, maybe a new appliance replacing one that is worn out, maybe new tires and oil change, etc, etc, the list goes on and on. And you say people should save. Apparently 1:31 to haven’t noticed the inflation over the past year and a half. No working class people have gotten raises to keep up with higher cost of living. Do some research next time before spewing out words that mean nothing to the working class.
4:59 – Absolutely right!
Ok. You’re right. My tone was inappropriate. I do see people spending foolishly on things they shouldn’t be, and that makes me unsympathetic. But some good hardworking people are struggling through no fault of their own. But still, nobody should be borrowing $40K on a car with $600-700 monthly payments.
Govt will Ban Cash !!!! They want to completley CONTROL YOU with Electronic $$$$$$ !!!!! Bit Coin !!!!