A new study found that more people with prime and super-prime credit ratings are choosing to buy used cars instead of new ones.
Continue Reading Below
The study by Experian found the average loan amount for a new car surpassed $32,000 in Q1 2019. Meanwhile, the average loan amount in Q1 2019 for a used car was more than $20,000, a record high. The average monthly payment for a new car was $554 while a used vehicle was $391.
“Findings from the Q1 2019 State of the Automotive Finance Market report show that the percentage of prime (61.88 percent) and super-prime (44.78 percent) consumers choosing used vehicles reached an all-time high,” the analysis stated.
The report also found leasing payments rose but the time of a lease remained 36 months. The average lease payment for prime customers hit $456 while for super prime customers it was $452.
Experian found that credit scores remained flat year over year and “record highs continued with loan balances over $1.18 trillion.”
"While vehicle affordability continues to be top of mind for the industry, consumers are actively seeking ways to ensure they can afford the vehicle they purchase — a positive sign for all parties involved," Melinda Zabritski, Experian's senior director of automotive financial solutions, said in a statement. "It's important that lenders and dealers continue to monitor these trends so they can work with car shoppers to help them find the right vehicle with the right financing options."
After President Trump announced he was considering imposing 5 percent tariffs on imports from Mexico, experts have warned of potential rising car prices. The auto industry would be particularly affected since many companies rely on trade with Mexico for production, or for parts. In the first quarter, top U.S. carmakers reported declining vehicle sales.
Fox Business’ Brittany De Lea contributed to this report.