Average Monthly Loan Payment Hits All-Time Record Of $523

Pay more, get more, right?

If you looked outside over the hedgerow that separates you and your neighbor and wondered how they could afford that shiny new set of wheels in the driveway, we have some numbers that may shock you. Or make you rush out to the local dealership in an attempt at one-upmanship. Data from Experian – that credit analysis company that didn’t leak all your data – says the average monthly car loan payment has reached an all-time high of $523 a month with borrowings taking out an average of $31,453 in loans. That’s a record-high, according to CNBC.

More Car-Buying News:

With higher payments and higher loan balances, borrowers need to extend their loan terms. According to Experian, in the first quarter of this year was just over five years and nine months. When you add in the fact that the average interest rate for a new vehicle also increased to 5.17 percent, and you get record, all-time-high loans, and monthly payments.

Loan companies are also tightening the purse strings when it decides who gets an auto loan. Loans to subprime and deep subprime borrowers decreased 8.4 percent and 14.1 percent, respectively, according to Experian. That means delinquent loans – loans where the borrowing is behind on making payments – is also decreasing. Thirty-day delinquent loans are down 1.86 percent through the first quarter while 60-day delinquencies are steady at 0.66 percent. Both are below historical averages.

Right now, it might be a boon for automakers, but if history tells us anything, it will only be a matter of time before sales slow and the market contracts. Or worse, delinquencies rise, sticking borrowers with vehicles that are worth less than the remaining loan balance. U.S. auto sales are looking to be more than 17 million vehicles this year if consumer trends continue. It’s doubtful any of the current tit-for-tat tariff war that’s happening will affect car sales this year. But the future is uncertain.

Source: CNBC