The post-COVID times ahead will be rough (to say the least), and not just from a financial perspective. In times like these, knowledge truly is power, and studying the latest car loan statistics before doubling down on your next car purchase could mean the difference between financial stability and bankruptcy.
In this article, we’ll cover all the latest figures concerning average payments, loan rates, and credit scores you need to consider before taking your new baby out for a spin.
So far so good? If so, then just sit back and enjoy the ride!
Top 10 Most Fascinating Car Loan Statistics
- 115.98 million was the total number of car loan accounts in the US in 2019.
- 84.6% of newly purchased vehicles in the US are financed.
- The total US car loan debt for Q1 2020 amounted to $1.35 trillion.
- The average monthly payment for new vehicles indebted for more than 5 years is $554.
- 32.7% of all US car loans were approved by banks.
- Around 20% of car loan seekers lent $50,000, average car payment stats from 2018 show.
- In 2019, the average down payment on a car was around 11.7%, for both new and used purchases.
- 4.9% of all car loan balances were delinquent for more than 90 days by the end of 2019.
- Half a million additional units were repossessed in 2018 compared to 2017.
- The average loan length reached a record high 70.6 months in March 2020.
Auto Loan Statistics in the US
1. 115.98 million was the total number of car loan accounts in the US in 2019.
(Finder)
Not only that but the number of car loan accounts has increased by a whopping 31.6 million only in the past ten years.
In plain English, this is a 40% rise over the span of a single decade, and the numbers just keep on growing. As such, they’re currently higher than they’ve ever been in US history!
2. 84.6% of newly purchased vehicles in the US are financed, car loan data from 2019 reveals.
(US PIRG) (Statista)
In addition, another 54.6% of used cars were also financed.
For comparison, in 2009, around 75% of new car purchases, and 53% of used car sales were financed. Hence, we see that newly purchased cars had the biggest increase of the two (nearly 10%).
3. Used cars have a 57.3% market share in the US, auto finance figures indicate.
(Experian)
Meaning, new cars make only 42.7% of the US car market, and for good reason too. Used cars are considerably cheaper, so this figure shouldn’t raise any eyebrows.
4. The total US auto loan debt in 2019 amounted to $1.2 trillion ($1.35 Q1 2020).
(Experian)
The biggest amount was reported by banks ($371 billion), followed by credit unions ($351.8 billion), and captive financing with $261.1 billion in car loan debts; the remaining $212.9 billion are financed.
5. The total American car loan debt represents 9.17% of the total US household debt (as of 2019).
(Finder) (Federal Reserve)
Consequently, they take third place, right after student loans (11%) and mortgages (a staggering 68% — which is roughly $10 trillion).
6. The 2019 new car auto loan interest rates for 48-month and 60-month deals were 4.71% and 4.77%, respectively.
(Bankrate)
48-month and 60-month loans have similar interest rates and are the most popular car loan deals seeing how most banks don’t allow a 72-month auto loan, or an 84-month auto loan because of the elevated risk of damage or malfunction.
7. When it comes to used car interest rates, 5.26% was the average for a 36-month car loan in 2019.
(Bankrate)
Despite loans being much lower for used cars, for obvious reasons, the interest rates are much higher, averaging at 5.26% for a 36-month car loan.
8. $554 is the 2019 average monthly car payment for new vehicles indebted for more than 5 years.
(Credit Karma)
In Q1 2019, the average monthly payment for a new car bought on a loan for more than 5 years (60 months) was $554, whereas the average payment for used cars was $391.
As for leased cars, the monthly payment was somewhere in between, averaging at $457 over the same time period.
9. The average car loan payment for new cars increased by $31 between 2018–2019.
(Credit Karma)
Average used car payments, on the other hand, increased by just $19 during the same time frame. Estimates also point out that this upward trajectory will continue in the near future as well.
10. In 2019, the average down payment on a car was around 11.7%, for both new and used purchases, according to average car payment stats.
(Edmunds)
This sum is nothing to sneeze at, given the fact that new cars have increased in value (by a whopping 33%); hence, the average down payment on a car is actually up by 9% since 2007.
Auto Loan Origination Statistics
11. 32.7% of all US car loans were approved by banks.
(Statista)
According to loan origination data from 2019, banks had the largest percentage, accounting for almost a third of the total number of car loans attributed that year.
In addition, captive financing made up 29.8% of US car loans, credit unions (19.9%), and fourth and fifth place went to finance co and BHPF with 11.9% and 5.7%, respectively.
12. In 2018, around 20% of car loan seekers lent $50,000, average car loan data shows.
(CNBC)
According to recent stock market statistics, the price of gas is on the decline, yet the price of vehicles gets higher with each passing year!
Nevertheless, this doesn’t affect car sales in the slightest. As consumer spending statistics point out, around 17 million annual sales were made in the past 4 years and showing no signs of ever slowing down.
13. Car debt in America accounted for 5.5% of the national GDP in 2019.
(US PIRG)
Meaning, it had a higher value than at any other time in history, not counting the recession periods of 2001 and 2007.
14. Car loan statistics for 2019 reveal that individuals with prime credit scores account for 42.6% of the total car loan debt.
(Experian)
The overall loan balance risk distribution in 2019 remains largely the same as the one seen two years prior.
By June 2019, the biggest share of car loan accounts belonged to borrowers with a credit score between 661 and 780 (those qualifying in the prime category).
Also, credit score statistics show that 20.2% of borrowers had credit scores of 781 to 850 (superprime category).
The share of those with the lowest credit scores (300–500) accounted for just 3.5% of the total car loan balances.
15. Recent car loan facts show that captive financing accounted for 54.8% of the US auto finance market for new cars in 2019.
(Experian)
While the total car-loan market is dominated by banks, captive financing is more focused on new car loans, representing more than half of its shares.
Following data from Q2 2019 published by Experian, banks take second place in the new car loans market, contributing with a 28% market share.
16. Auto loan market data shows that merely 0.8% of BHPH financing was aimed at new car loans in 2019.
(NIADA) (Experian)
The buy here pay here (BHPH for short) method of financing, also known as dealership financing, represented a significantly bigger share of the market for used car loans, than for new ones (11.9% vs. 0.1%).
Based on a report of the National Independent Automobile Dealers Association (NIADA), in 2018, the average BHPH US auto finance amount per vehicle was approximately $7,000.
Car Loan Statistics: Debts & Trends
17. By the end of 2019, 4.9% of all car loan balances were delinquent for more than 90 days.
(New York Fed) (CNBC)
Following the latest data on delinquency percentages presented by the New York Federal Reserve, the share of car loan accounts that are seriously delinquent for more than 90 days reached the same delinquency level of the post-recession 2009.
By the end of 2018, more than 7 million Americans were over 90 days delinquent on their car loan accounts. Delinquency rates that are 90 days overdue are steadily climbing, ever since they reached their lowest post-recession share in Q3 2014 (3.1%).
18. The debt to income ratio for a car loan should not exceed 40% including all other expenses.
(Car Loans of America) (Experian)
Personal finance statistics show that the totality of your monthly debt expenses including your average monthly payment, car insurance, mortgage, and other housing expenses, should not be over 40% of your income.
19. According to car repossession statistics from 2018, half a million additional units were repossessed compared to 2017.
(Title Loanser) (Experian)
Each year around 2 million vehicles in the US are repossessed due to delayed car loan payments; meaning that around 5,418 repossessions occur on a daily basis.
The repossession rate relative to the number of new car annual purchases is a staggering 65%.
20. Car loan interest rates for 60-month loans reached 4.42% on March 31, 2020.
(Statista)
Effectively this marks a decline from 4.77% since March 2019.
The average loan rates for vehicles are expected to decline even further due to the coronavirus outbreak — a tendency that is also observed in the latest interest rate trends among various mortgage statistics.
21. The average car loan length for March 2020 reached a record high of 70.6 months.
(Statista) (Statista) (Edmunds)
More than 60 months is the answer to the question “how long are car loans in Q1 2020.” In fact, almost 70% of new car loans during this period were longer than 60 months.
The COVID-19 pandemic essentially prolonged the average length of automotive loans in March 2020 to a record high of 70.6 months.
FAQs
What percentage of people have car loans?
(Statista) (Forbes)
In 2017, around 44% of the US adult population had a car loan debt, which translates as about 108.66 million. In 2019, around 84.6% of new car purchases were aided by a loan, as well as 54.6% of used car purchases.
What is the average monthly car payment in the US?
(Statista) (Forbes) (Credit Karma)
As of Q1 2019, the average monthly payment for a new car bought on a loan for more than 5 years (60 months) was $554, whereas the average monthly payment for used cars bought with the same loans was $391.
As for leased cars, the monthly payment averaged $457 for Q1 2019.
What is a good rate for a car loan?
(Edmunds) (Experian)
The average US vehicle loan has an interest rate of 6.16% for new purchases and 10.06% for used vehicles for a loan length of over 60 months.
However, car finance rates vary depending on the credit score of the borrower, the length of the loan, the age of the car, and of course, the down payment.
So, the answer to the question “what is a good APR for a car loan” depends on several factors, yet, on average, the annual percentage rate for car loans varies between 3% to 10%.
What is the average car loan amount?
(Experian)
The average loan amount for a new purchase was $32,187 in March 2019.
For the same period, the average loan amount for used passenger vehicles reached $20,137.
Conclusion
Riding with style might end-up costing you a lot if you don’t consider the optimal rates and the optimal duration of your car loan.
Given the rise in delinquency and repossession rates of car loans in 2019, which were present even before the notorious coronavirus outbreak, one can conclude that it is a good time to re-evaluate new car payment methods.
This is precisely where the latest car loan statistics come in handy as they can be used as a guide for finding the perfect financial solution for your new vehicle.
