Average used car loan amounts


Earlier this year, average used car loan amounts hit near-record highs for the fourth quarter of 2021, according to Experian’s State of the Auto Finance Market Report. Here’s a look at what’s going on with used car loan amounts and what that means for consumer car loans.

Soaring used car loan amounts. Often, borrowers opt for used vehicles because they are looking for a bargain out of necessity. This could be even more true if the upward trend in used car prices continues. Last quarter, the average used car loan amount jumped to 20.59% more than loan amounts a year earlier. This average high – $27,291 – is $4,661 more expensive than in 2020.

Average amount of a used car loan by loan level. Loan amount averages also vary by credit level, and all averages are up, from overall loan amount to monthly payment and even loan term. Here’s how the averages change based on the range of FICO scores:

  • Deep Subprime borrowers (300 to 500) pay an average of $497 per month for 61.60 months, with an average loan amount of $19,253.
  • Subprime (501-600) borrowers pay the most per month, $507, for 65.53 months, with an average loan amount of $22,818.
  • Near-Prime borrowers (601 – 660) pay around $505 on average for 68.41 months and have an average loan amount of $27,473.
  • First level borrowers (661 to 780), pay around $480 per month for 68.46 months and have the highest average loan amount of $29,065.
  • Super Prime borrowers (781 to 850) pay an average of $464 per month for 64.94 months and have an average loan amount of $27,722.

It’s too early to tell if this used car price spike has peaked, but it’s important to be prepared in case prices continue to rise.

Saving money on a used car loan. To help you get the deal that’s right for you amid rising auto loan averages, it’s important to know how you can save on finance. Here are five ways to save the most money possible.

  • Look for offers and incentives – If you are a qualified buyer, you may be eligible for offers and incentives such as low APRs or cash bonus offers. Not all automakers offer them, so check with a dealership to see which is most affordable.
  • Prepare a down payment – ​​Using a down payment means borrowing less and paying less interest overall.
  • Use a trade-in – With the cost of used cars skyrocketing, your trade-in could be worth more than expected. Combining an exchange with equity with your down payment can save you even more.
  • Choose the shortest loan term – The longer your loan balance, the more interest you pay.
  • Pay taxes, titles, and license fees up front – If you pay these fees up front and don’t factor them into your loan repayment, you save interest.

With the high cost of getting a used car loan these days, it’s important to save where you can. We don’t know if loans will continue to get more expensive over the course of this year, or how much more prices will go up, so do what you can to get your best auto loan deal by being prepared.


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