Americans owe more money for new and used cars than ever: $866 billion, according to Experian Automotive.
That’s the outstanding loan balance for vehicles in the U.S. and not only have Americans borrowed more than ever for cars, the average length of new car loans is a record-high 67.2 months – almost six years.
It’s not entirely surprising as new cars are being sold for their highest prices ever, according to TrueCar. The average transaction price for new cars in 2014 was $31,831. Next year it’s expected to surpass the $32,500.
Also it’s well-documented that lenders have loosened up their requirements, which certainly played a role in the record loan number, but only in the sense that sub-prime and deep sub-prime buyers were give more loans – like everyone else. (more…)