Auto Consumers Stretched to the Limit?
Third-quarter stats find budget acrobatics, more accounts in arrears

Thirty-day delinquencies ticked up slightly in the third quarter to about 3%, and 60-day delinquencies rose to 1%.
Pexels/Mikhail Nilov
U.S. auto consumers are stretching their budgets to new extremes, and delinquent loans are on the rise, based on third-quarter data.
Though auto interest rates have fallen slightly, average loan amounts and monthly payments have still headed in the opposite direction, and more consumers are taking out extra-long loan terms to accommodate the inflation, Experian research found.
The patterns held for both new and used vehicles as many consumers who might have bought new in the past have turned to the used market for greater affordability.
The average interest rates for new and used autos barely ticked down in the quarter. The new-vehicle average fell by just about a tenth of a percentage point to 6.6%, while the average for used autos fell about half a percentage point to 11.4%, Experian reported.
Average loan amounts, meanwhile, shot up by 3% for both new and used autos, landing at $42,332 for new vehicles and $27,128 for used.
In response to the change, vehicle loan terms on the extreme end of the scale also rose, Experian found.
New-auto loans on 73- to 84-month terms rose three percentage points to about 30%, while those surpassing 85 months rose about half a percentage point to 2%.
On the used side, 73- to 84-month terms climbed a percentage point to 27%, and 85-month-plus loans ticked up slightly to 1%.
“Consumers tend to shop for vehicles based on monthly payment,” said Experian Head of Automotive Financial Insights Melinda Zabritski. “Although we’re beginning to see interest rates slowly decline, affordability remains top of mind for many shoppers.”
Some consumers can’t keep up, despite loan-stretching tactics. Thirty-day delinquencies ticked up slightly in the quarter to about 3%, and 60-day delinquencies rose to 1%, Experian said.
DIG DEEPER: AI-Guided Car-Shopping Insight
New-vehicle financing increased in the quarter by a percentage point to 43%, while used-auto financing fell at the same rate to 57%.
Originally posted on Auto Dealer Today
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →