U.S. consumers are responding to rising prices for new trucks and cars by getting deeper into debt, driving the average new vehicle loan to a record-high $40,290 during the second quarter, credit monitoring company Experian said Thursday.
The average monthly payment for a new vehicle loan jumped to $667 in the second quarter, a rise of about 15% compared to a year ago, Experian said in its most recent report on the automotive finance market. The average amount borrowed jumped 13.2%, Experian said.
The length of the average new vehicle loan remained flat in the second quarter from a year earlier at just over 69 months. Used car buyers also are borrowing further. The average used vehicle loan rose 18.7% to $28,534, with an average monthly payment of $515, up 17%.
Despite the Federal Reserve’s efforts to slow the economy by hiking interest rates, the cost of new vehicles in the U.S. has been climbing faster than the overall inflation rate for most of the year. Automakers say they still cannot keep up with demand due to shortages of semiconductors and other supply chain snarls.
The price of the average new truck or car reached a record $46,259 this month, market research firm J.D. Power said this week.
Experian said loan data shows that many consumers are choosing used trucks or cars as new vehicle prices surge. Used vehicles made up 61.8% of all vehicle loans during the second quarter, a rise from 58.5% a year ago. Of vehicles financed in the second quarter, 60% were sport utility vehicles, Experian said.