According to recent data, a record 107 million Americans currently have auto loans. Auto loans have been growing rapidly over the past few years. In fact, in 2012, only about 80 million Americans had car loans. Rather than high numbers of car loans, there were more home mortgages. But that’s not the case anymore.
Today, the number of auto loans exceeds the number of home loans. This contributed to the fact that carmakers have seen year after year of record high sales. But what exactly did 2017 look like for auto loans?
For starters, the national average U.S. auto loan interest rate in 2017 was 4.21% over 60-month loans. However, it varied among individual consumers based on their credit score, length of the loan, the age of the car, and if they were risky or bad credit auto leads.
Additionally, the average monthly car payment on a new vehicle in 2017 was $479. Furthermore, the average car loan totaled to be $30,032 with an average loan length of 68 months. Additionally, the 43% of people financing their vehicle saw a rise in interest rates on auto loans.
However, there wasn’t much change in the two types of auto loans: dealer financing and direct loans. Dealer financing is a loan obtained through the dealership at which the vehicle is bought. On the other hand, a direct loan is a traditional loan obtained through a bank or another financial institution. While a direct loan is more common, it’s often seen that risky or bad credit auto leads go through the dealership directly. This is because dealerships are usually able to offer special manufacturer-sponsored incentives as well as additional offers than banks would not be able to give consumers.
Online auto leads were seen to increase in 2017 with the help of innovative technology that allows consumers to shop for cars online with ease.
Unfortunately, there are currently six million people who are behind on their car payments. Being behind on payments puts consumers at risk of having their vehicle repossessed. This may be contributed to the fact that auto loans were increasingly easy for consumers to get approved for in 2017.
Overall, 2017 saw a drastic increase in the number of people who purchased cars with the help of auto loans. With these loans, consumers are able to have their necessary vehicle while not having to put a large sum of money down before buying the car.
