American motorists are paying more for their vehicles and borrowing more.

Even as U.S. car sales surge to record levels, a new study shows that American motorists are spending more than ever for their vehicles – with loan levels also reaching new records.

Searching for a way to offset rising prices, a growing number of buyers are turning to leasing, according to Experian Automotive which issued its quarterly “State of Automotive Financing” report on Thursday.

“People shop for vehicles largely based on monthly price, and right now, average dollar amounts for new vehicle loans are soaring,” said Experian’s auto credit director Melinda Zabritski.

“In order to stay within their budget goals, we have seen that more consumers — even those within the prime and super-prime risk categories — are turning to leasing and used vehicles as cost-effective alternatives to buying new,” she added.

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The surge in vehicle costs has raised a number of red flags, according to industry observers. Some analysts warn that a growing number of motorists are being priced out of the new vehicle market, especially in the wake of the recent interest hike ordered by the Federal Reserve Board.

More shoppers are turning to leasing.

Meanwhile, a study released by Fitch Ratings last week noted that delinquencies on subprime auto loans have jumped to a six-year high. That poses a threat when those loans are packaged and resold – much as the economy got into trouble when weak home loans were bundled together in the years leading up to the Great Recession.

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The average new vehicle loan surged to a record $29,551 during the fourth quarter of 2015, a 4% year-over-year increase, according to Experian. The total outstanding balance of all motor vehicle loans, new and used, ended the year at $987 billion, an 11% year-over-year jump.

At the same time, the typical new car loan stretched to 67 months during the fourth quarter of 2015. And used car loans grew to 63 months. Both were up a month from the final quarter of 2014. And those were just averages; 29% of new vehicle loans were for anywhere from 73 to 84 months, a 9.6% jump since 2010.

Several factors have been fueling record new car sales. Subprime and deep subprime loans, which largely vanished during the recession, have come back in force. And those borrowers tend to pay higher interest rates for longer loans. While the average new car buyer paid an interest rate of 4.63%, reported Experian, subprime rates ran 10%, with those loans averaging 72 months.

A number of reports have shown new vehicle prices running at or near record levels in recent months. Even those buyers with solid credit have been looking for ways to hold down monthly payments, and that’s breathed new life into leasing – where motorists effectively only pay for the short-term depreciation of a vehicle.

About a third – 33.6% — of new vehicles were leased during the final quarter of 2015. That was up four percentage points in a year – and 10 points since the final quarter of 2011. The typical lease ran $412 a month during the most recent quarter compared to $493 for a new vehicle loan. Used car buyers spent an average $359 a month.

The increased availability of so-called Certified Pre-Owned, or CPO, programs, have helped draw some traditional new car buyers into the used car market in recent years. That’s one reason, said Experian’s Zabritski, why, ““Credit scores are flattening out for new vehicle financing and more prime consumers are shifting to used, which is helping increase the average score there as well.”

Where many consumers once paid cash, the trend has shifted in the other direction, Experian found. During the final quarter of 2015, 85.9% of new vehicles were financed, along with 54.7% of used vehicles.

(Safety advocates kick off “My Car Does What?” campaign. Click Here for more.)

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