Record Auto Loans Taken As Interest Rates Drop

record auto loans taken as interest rates drop

Though the calendar is about to change to 2014, it appears to be 2007 all over again in dealer lots and showrooms nationwide as a record number of auto loans with low interest rates were signed during the third quarter of 2013.

According to Experian, the average amount taken out for a new car loan this quarter was $26,719, the highest amount financed since the start of the Great Recession in 2008. As a bonus, each loan for a new car holds an interest rate average of 4.27 percent; used car loans, on the other hand, hold an average rate of 8.63 percent.

Reasons for the record loan amounts include the rising cost in new cars overall due to buyers adding extra content and features that best suit their needs and wants, as well as interest in luxury vehicles, whose sales have gone up 11 percent this year due to leasing programs feeding fuel to the fire.

In exchange for taking out huge loans, consumers are opting to stretch out their notes for as long as possible to keep payments low; the average payment in the third quarter of 2013 is $458. Around 40 percent opt to pay off their loan for 65 months, while 19 percent choose to spend anywhere from 73 to 84 months doing the same.

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  • Lou_BC Lou_BC on Dec 07, 2013

    The lemmings are lining up at the fiscal cliff once again. Why do those that swim at the shallow end of the gene pool create the most offspring?

  • Jimmyy Jimmyy on Dec 07, 2013

    If you are over the age of 35, and you need to borrow money for an automobile purchase, then you need to address the root of the problem ... something has gone very wrong with your career.

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    • Bikegoesbaa Bikegoesbaa on Dec 09, 2013

      @jimmyy If you already have a good career that is generating plenty of excess cash, why would you go back to college at 45?

  • Chaparral Chaparral on Dec 07, 2013

    There is one buyer for whom cash purchases - or even being a buyer - makes no sense. The car-killer. In the past five years, I have blown three engines, worn another to the point that it was 10 MPH slower on the top end, destroyed all the bearings and shafts in a Corvette gearbox, cracked a subframe, stress-cracked unibody parts (!). My new car will be turned in with 39,000 miles, cosmetically fine and good on the interior. All the maintenance will be done on-schedule with full records. It'll have been under warranty and any actual breakages will have been covered. It'll look fine on a CarFAX and the excess-wear charges will be minimal. You won't want it. It'll drive like it has 176,000 miles.

  • APaGttH APaGttH on Dec 07, 2013

    Sigh. A story about Jalopnik (admittedly positive) A story about a drunken party girl (OK the chase video was awesome) A story about Latin American cars lacking safety equipment and the Chevy Spark is made the example. Now a story about bloating car loans and the pic is a Cadillac dealer. (isn't Dodge the King of bloated car loans to anyone who can leave moisture on a mirror?) Oh, and the real tests of the Chevy SS are consistently showing 0 to 60 in 4.5 seconds in multiple reviews. I feel TTAC is slipping backwards into its old ways. :-/

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    • 3Deuce27 3Deuce27 on Dec 07, 2013

      @jimmyy ^--- Another example of how effective the corporate main stream media and political operatives were in pulling the wool over the American public regarding the financial melt down. Now go and do some non-prejudicial, eyes wide open research on what really brought on the crisis. 'Leftists' ... you mean those right of center Democrats? Hell, the're not even Republican Light anymore, they are firmly over the line and kissing the ass of their Republican brethren. Eisenhower was more of a 'so called' liberal, then the current crop of Demo's. The Democrats and Republicans with the support of their corporate masters, own the game, and they all go by a well practiced script. One plays good guy, the other plays bad guy, but they are both vested in the game, and both are almost equally vile, and that means until you do something about it, they own you too. The take away is, both parties own the game, and you don't, but, you could, if only......