Americans now owe $1.46 trillion in auto loan debt, a new high, as gas prices continue to wreak havoc throughout the world. For new cars, the average monthly payment is $644, according to LendingTree, an online financing firm.
With a 12 percent increase over last year’s costs, this is a record-high price. As a result, Americans are borrowing an average of $39,721 to purchase new cars. Used cars cost an additional $27,291.
According to LendingTree, the total amount of auto loan debt owed by Americans is currently $1.46 trillion.
This equates to 9.4% of all consumer debt in the United States. After mortgages and student loans, auto loan debt is considered the third-largest form of consumer debt.
More than $60 billion in new vehicle loans are requested by American consumers every month, according to LendingTree. New automobiles take an average of 69.7 months to repay; secondhand cars take 67.4 months, and leases take 36.8 months to repay.
The online lender went on to say that in the fourth quarter of 2021, Americans in their 30s and 40s took out the latest vehicle loans. They borrowed between $41.4 billion and $42.3 billion from various sources.
People in their 50s borrowed $10 billion less than those in their 20s and 30s (a total of $33.2 billion). For the most part, older generations were less likely to take on debt.
It’s been a decade since the number of people with car loans doubled.
People in the United States are taking on more car loan debt than they have in ten years. In the second quarter of 2021, vehicle loan debt reached $1.42 trillion. A decade ago, this would have been the case.
Melina Zabritski, Experian’s Senior Director of Automotive Financial Solutions, said of the rise in vehicle loan debt: “The balances have just been continuing to grow over the previous 10-15 years. It’s basically an increase that’s happening all the time. “Every year, every quarter, the growth is just unstoppable.”
Experian is also seeing an increase in the average team size for both new and used automobiles, according to Zabritski. Loans with terms of 72 months or more are now the most popular.
According to a senior vice president of TransUnion’s auto division, the increase in auto loan debt is directly linked to the value of automobiles. There is a growing demand for more expensive cars among consumers. Smaller vehicles like sedans are being replaced by larger vehicles like SUVs in consumer preferences.”