As gas prices continue to cause struggles worldwide, Americans now owe $1.46 trillion in auto loan debt as average payments hit a record high. According to the online lending platform, LendingTree, the average car payment for new vehicles is now $644. This marks a record high as it is a 12% increase prior to last year’s prices. In order to make this monthly payment, Americans are now borrowing an average of $39,721 for new vehicles. And $27,291 for used vehicles.
- LendingTree statistics reveals that the average new car monthly payment is now $644, up nearly 12% over the prior year.
- Auto loan debt is now considered the third-highest debt category behind home mortgages and student loans.
- The average auto loan term on new vehicles is now 69.7 months or nearly six years.
LendingTree also states that overall, Americans now owe $1.46 trillion in auto loan debt. This accounts for 9.4% of American consumer debt. Auto loan debt is also dubbed the third-largest debt category behind mortgages and student loans.
LendingTree further reveals that on average, Americans seek more than $60 billion in new auto loans each month. They are also taking more years to pay back their loans, with the average being 69.7 months for new cars; 67.4 months for used cars; and 36.8 for leased cars.
The online lender goes on to add that Americans in their 30s and 40s reportedly took out the latest auto loans in the fourth quarter of 2021. They borrowed $41.4 and $42.3 billion. Those in their 50s borrowed about $10 billion less ($33.2 billion). The oldest generations notably borrowed the least.
Auto Loan Debt Has Doubled in the Last Decade
According to Yahoo! Money, Americans are now taking on more auto loan debt than in the last decade. The auto loan debt hit $1.42 trillion in the second quarter of 2021. This means doubling over the past 10 years.
Speaking about the increase in auto loan debt, Melina Zabritski, Experian’s Senior Director of Automotive Financial Solutions, shared, “The balances have been just continuing to grow over the last 10-15 years. It’s just a constant steady increase. Every year, every quarter is just continually growing.”
Zabritski also told the media outlet that Experian is continuing to see the average team increase for both new and used vehicles. “The 72-month term category has become the most common loan term.”
Meanwhile, Satyan Merchant, Senior Vice President of TransUnion’s auto business, went on to add that the increase in auto loan debt is all tied to auto vehicle values. “People are seeking to purchase more expensive vehicles. There’s also a shift in consumer preferences away from smaller vehicles like sedans to larger vehicles like SUVs.”