New car loan repayments hit record highs, approaching $ 600 per month, CNBC reported Thursday March 4, citing data from the consumer credit reporting company Experiential.

Experian’s auto finance data is gleaned from the fourth quarter of 2020, which saw an increase in new car sales. New vehicle loans averaged $ 35,228, about $ 2,000 more than in 2019, bringing the average monthly loan amount to $ 576.

Used car loans have also reached record highs, with people borrowing an average of $ 24,467, an increase of almost $ 1,700 year over year. Monthly payments averaged $ 413, the first time average used car loan payments were over $ 400.

The increase in monthly loan payment amounts coincides with the largest increase in 12-month borrowing, Experian said.

“We have increased higher amounts year over year in 2020 than we have ever done before and have reached record levels of loan amounts and record levels of payments” Melinda Zabritsky, senior director of Experian’s automotive financial solutions team, told CNBC.

“I certainly remember when that ($ 400) was the average payment for a new car,” Zabritsky said. “Those days are over. We’re definitely over $ 400 and don’t expect to see that go down. “

One of the main reasons for the larger loans is the unprecedented rise in the price of new vehicles and the desire of consumers for trucks and SUVs, which are largely priced higher. According to the article, the price of new vehicles is also adding to the demand for high-tech options such as integrated backup cameras and GPS.

The pandemic has helped fuel the appetite for used vehicles, further tightening an already tight market. Prices have increased with demand, pushing sales to some 40 million vehicles sold in 2020, Zabritski said, according to CNBC.

Vroom posted fourth-quarter revenue of $ 405.8 million earlier this week, as more people turned to digital channels to purchase used cars and trucks. Sales were up 74% year-over-year as demand for used vehicles surpassed pre-pandemic levels.

the digital shift brought on by the pandemic has disrupted the way people apply for auto loans, with around a third of car buyers handling the loan process online.



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