CARS.COM — The amount of the monthly payment on your car is a bit like the horsepower in your car: Absent more context, neither number gives the full story. That doesn't rule out comparisons, of course, and a new report gives a quarterly yardstick for just that.
Industry data provider Experian Automotive last week released its latest report, "State of the Automotive Finance Market," so when it comes to figures for vehicle payments, compare away. Here are the takeaways on car costs:
- In the first quarter of 2017, the cost of an average monthly new-car payment was $509; the average car lease payment was $410. Those are up just $5 and $4, respectively, versus the first quarter of 2016 — about 1 percent apiece.
- That's despite new-car loans averaging $30,534 in total, up $513 (1.7 percent) over the year-ago quarter.
- Interest rates averaged 4.87 percent — about the same as a year earlier — so how did car shoppers keep payments down? Look at auto loan lengths. The average new-car loan was 68.5 months, up about half a month versus the first quarter of 2016. But more than a third of new-car loans were 73 to 84 months, up from 31.3 percent a year earlier. Most shocking: 1.3 percent of new-car loans — about 1 in 77— were 85 to 96 months. That's up to eight years of car payments.
- The average new-car buyer in the first quarter had a credit score of 717 (on a scale from 300 to 850), while the average used-car shopper scored 652. Those scores are important: In the first quarter, the vast majority of new-car sales — 85.5 percent — were financed, while 53.3 percent of used-car sales were financed.
Some other nuggets:
- The average car lease term in the first quarter was 36.2 months. The average used-car loan was for 63.8 months and $19,126 total.
- The oft-discussed leasing boom has hit a plateau. About 31.1 percent of all new cars were leased in the first quarter. That's down a tad versus the year-ago quarter.
- Nearly 3 in 4 new-car loans and leases (74 percent) went to buyers with credit scores above 660, and about 29 percent went to borrowers with scores above 780. That ratio has increased a little over the past year, while loans and leases to the opposite group — subprime borrowers, or those rated 600 or lower — have declined. Subprime borrowers accounted for about 8.8 percent of new loans and leases in the first quarter, down from 9.5 percent a year ago.
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