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The Average Used Car Payment Is Over $400
The Average Used Car Payment Is Over $400-March 2024
2024-02-19 EST 22:09:32

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When the global pandemic paused new car production in early 2020, used supply went down and prices rose. The result, is that the average used car payment is now $413, though used car payments have been headed for the $400 mark for a while.

, via , outlines financing trends caused or exacerbated by the pandemic including record high averages for the amount financed and record long loan terms.

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Last year:

The average payment rose $18, from $395 in 2019 to $413 in 2020 The average amount financed went from $20,824 in 2019 to $22,467 in 2020 The average loan term increased from 64.67 months in 2019 to 65.58 months in 2020.

The only thing that went down was the average APR, which has been decreasing since 2018. The average went from 9.05 percent in 2019 to 8.43 percent last year.

Image for article titled The Average Used Car Payment Is Over $400

For new cars, loan terms of 72 months are the most common while 73-84 month terms come in a close second. You’d think that the longer terms along with good rates for prime and super-prime credit buyers might result in lower average monthly payments. You’d be wrong. High vehicle prices have kept monthly payments high as well, with CarsDirect saying the average monthly payment on a new vehicles is $581.

While the pandemic has driven some of this, the trend toward big payments and long financing terms has been clear for a while. Obviously, people need to get around and public transportation is a mess. But these financing trends, coupled with ever-higher sale prices for new and used cars are troubling.

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