Despite increasing interest rates, Americans are borrowing more for their cars. If you’re looking to finance a car purchase, you’ll want to choose a lender with the best rates and terms to get the most out of your investment.
According to Experian, in the third quarter of 2018, the average loan amount for a new car was $30,977 and for a used car set a new record high of $19,861.
The Experian data reveals some interesting insights:
- Credit unions account for 22.6 percent of total auto financing, an increase of 1.6 percent over the same period in 2017. Bank share of financing decreased by 1.9 percent to 31 percent.
- Credit unions saw gains in the market share of financing for both new and used cars.
- 85 percent of new auto loans and 53 percent of used car loans are financed.
- Loan terms are growing longer. Overall, 71 percent of new loans in the quarter were for 61 or more months.
- Average payments for both new ($530) and used ($400) loans hit highs.
- Average loan interest rates are also rising: 63 basis points for new and 31 basis points for old autos year over year.
What does all this mean for the average car-buyer? It means that people are spending more on both new and used cars, driven partly by rising interest rates. And a growing percentage of lenders are choosing credit unions, which often provide better loan rates and terms.
Palmetto Citizens Federal Credit Union offers Columbia, SC residents and workers a great option for auto loans. We offer low interest rates, no payments for up to 90 days and the same rates on new cars and used cars up to three years old. You can apply for a Palmetto Citizens auto loan online or by visiting any of our locations. Contact us today for more information.