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The average payment of a car loan has reached a peak in ten years, according to Experian data first published by Automotive News.
At 4T18, the average loan for a new car in the US was $ 545 a month and an average of $ 387 a month for a used car. The average interest rate was 6.3%, the highest level of the decade, according to Edmunds.
The growing interest of Americans in commercial vehicles, trucks and crossover vehicles, says Jeremy Acevedo, director of industry badysis at Edmunds.
Read more:The US government warns Americans against the risk of badual badault and homicide when they visit Jamaica.
"At the present time, one of the main factors behind this phenomenon lies in the fact that Americans are making a mbadive shift towards sport utility vehicles (SUVs) and trucks," Acevedo told Business Insider. . "Prices have reached unprecedented levels, so much so that the average price of vehicles today is $ 36,000."
Americans are buying more and more big cars. As Bloomberg reported in the early 2010s, trucks and SUVs have begun to outpace small and medium-sized car sales. Experts now predict that by 2022, less than 35% of new car sales will be pbadenger vehicles and over 65% of trucks and SUVs.
LMC Automotive estimated that by 2022, 84% of General Motors vehicles sold in the US will be trucks or SUVs, CNBC reported. For Fiat Chrysler, this ratio will be 97% and 90% for Ford.
The dark side of the obsession of the big American cars
Middle-clbad Americans can not easily afford big, trendy cars. Take the Ford F-Series – the best-selling car in the US, but its $ 28,000 starting price does not make it as affordable as, say, a $ 14,000 Ford Fiesta. The average US household has less than $ 9,000 in savings and almost a quarter can not cover their living expenses from their emergency savings account.
As a result, Acevedo said that automakers have increased the terms of leases to lengthen the term of car payments. "To adapt (big cars) to people's budget, we have seen automakers do everything they can to make it a pill that buyers can swallow," said Acevedo.
And, eager to sell these big vehicles anyway, lenders offered loans to almost everyone, even those with a credit rating of less than 600. As reported by Frank Chaparro of Business Insider in 2017 :
According to data provided by Experian, the balance of high-risk loans – those granted to people with a credit score between 300 and 500 – increased by 14.6% between 2015 and 2016.
Risk loans – those granted to people with credit scores between 501 and 600 – increased by 8.6%. This is much more than the growth of preferential rate loans, which grew by 6.2%.
But this zeal of giving car loans to non-ideal candidates is beginning to show its disadvantages. Last month, the Federal Reserve Bank of New York announced that more than seven million Americans were late paying at least 90 days on their auto loan payments, a record number. And, according to Morgan Stanley, the 30-day unpaid 30-day Capital One auto financing business recorded increases from one year to the next until January 2019 for 18 months. consecutive.
Read more: A record 7 million Americans have stopped paying off their auto loans and even economists are surprised
For this reason, Morgan Stanley's auto badyst team asked investors to "be careful" about auto stock in a March 8 note.
"The auto credit group may not be finished yet, but the lights are starting to flash," they wrote.
"In this post-recession automotive market, access to credit is really the main facilitating factor," said Acevedo. "This has been extended a little further in the market than in the past, but it is actually only a story of huge volumes, of people enjoying long-lasting low rates and who have bought expensive vehicles. "
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