Experian Automotive's recent analysis reveals that almost 19% of new vehicle loans have monthly payments of at least $1,000, an increase from 17.4% year-over-year. Notably, 74% of these loans are for non-luxury vehicles, with popular models like the Ford F-150 and Chevrolet Silverado 1500 leading the pack.
This shift is largely attributed to the global chip shortage that began in 2021, which forced automakers to focus on producing higher-end models, consequently driving up vehicle prices and loan amounts. The average amount borrowed has reached a record high of $43,952, with average monthly payments climbing to $770.
Despite a slight increase in loan delinquencies, which now stand at 2% for payments more than 30 days late, these rates remain below levels seen in 2018. Melinda Zabritski from Experian notes that the subprime market is primarily responsible for the uptick in delinquencies, as borrowers with lower credit scores face higher default risks.
Overall, the data indicates a robust auto market, with consumers increasingly accustomed to higher financing costs