Originally Posted By: Olas
I live on the,other sie of the world so I don't really know, but, do people in the US finance cars at 40-50-60 grand? It's not uncommon over here..
To be honest--I'm not really sure. I'm guessing yes, if only because its possible. Now if the question was, do
/many finance that much, that I would tend to doubt. It's a pretty steep monthly payment; and those who sign up for that probably have a pretty hefty income to swing that, and think not much of it--same people probably only have said loan for a year or two before trading into something else. I'd suspect most loans are in the 15-25k range, trade-in and downpayment tempering the principle down, but I honestly don't know.
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Google to the rescue! In a "duh" moment I googled it.
With an average at $26k financed for new (and $18k for used), I'd wager a $50k principle is "common" in the sense banks know how to do it, but perhaps it's not "commonly" done by the majority of buyers.
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Edmunds data tells the story: Since 2002, the average car loan term has slowly crept past five years, and is now inching past six-and-a-half years. In 2014, 62 percent of the auto loans were for terms over 60 months. And nearly 20 percent of the loans were for 73- to 84-month terms.
This is from 2010, and some here don't like Dave Ramsey, but I'm presuming his numbers to be correct:
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Here’s the deal. Recent statistics show that one-third of car buyers sign up for a six-year loan at an average interest rate of 9.6%. Among these buyers, the average price of the car is just over $26,000. This means that one-third of the cars you see on the road are dragging a $475 payment behind them.
More recent Edmunds info (August 2015) backs it up:
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The average monthly payment for a new vehicle in the second quarter of 2015 was $483, according to the new State of the Automotive Finance Market by Experian Automotive.
In comparison, the average used-car payment was $361 — widening the gap between the two to $122.
The information services company said this is the largest margin since it began publicly reporting the data in 2008.
The difference between the total loan amounts for new and used vehicles also increased significantly, the report said.
On average, car shoppers financed $28,524 for a new vehicle and $18,671 for used.
The study found that 31.4 percent of all new vehicles financed were leased, up from 30.2 percent the previous year.
The percentage of used vehicles financed for 73 months to 84 months increased by 14.8 percent from the second quarter of 2014 to reach 16.1 percent — the highest percentage on record.
A recent Edmunds' analysis found that average used car prices hit a record high of $18,800 in the second quarter, up 7.6 percent — or $1,300 per vehicle — from the second quarter of 2014. Meanwhile, the average age of used cars sold in Q2 2015 was 4.5 years, down from an average of 4.9 years the same time last year.
Same info, different sources:
Link1 Link2
