Americans are borrowing a record amount to pay for their cars, due in large part to a combination of higher prices for new cars and relatively low rates for auto loans.
The average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever, according to Experian Automotive. "It's not surprising buyers are borrowing more," says Melinda Zabritski, Experian's senior director of automotive credit. "If you look at the most popular segments, they are full-size pickups and SUVs. It's hard to find one of those models new and fully loaded for under $30,000."
The average auto loan in fourth quarter 2013 was $27,430 -- an increase of $739 compared with the same period of 2012. Those with non-prime credit ratings had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.