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Average new-vehicle loan term grows to 64 months; used, 60 months

December 21, 2012
Automotive loans are becoming easier to obtain, even as consumers elect for longer terms, according to a new Experian report. Also, new-vehicle loans to customers with subprime financing grew by nearly 3 percent during 2012’s third quarter and now comprise nearly 25 percent of all new-vehicle loans.
The total subprime financing market for used vehicles grew by more than 5 percent and now accounts for more than 54 percent of all used-car loans.
Even as access to financing becomes easier, the average loan term for new vehicles has climbed to 64 months, while the average used-vehicle loan term is now 60 months. Both are one month longer than at the same time a year ago.
Expanding loans to lower-risk tiers opens the market for more car shoppers, while a measurable increase in leasing means it is easier for consumers to get more vehicle for a lower monthly payment, according to Experian.
The Experian Automotive Report showed that lenders remain more risk-averse now than they were before the recent recession. The average credit score for a new car consumer now is 755, up from 749 before the recession, but lower than the average of 763 during the same time last year.