Interest rates on new car loans are at an all-time low, and car buyers are taking advantage of the great car loan interest rates by taking out larger auto loans.
According to Experian Automotive's latest State of the Automotive Finance Market report, interest rates averaged 4.27 percent in the third quarter of 2013, the lowest rate since it began reporting on rates. The report also found that the average amount financed for those buying a new car was $26,719, the largest amount since 2008 and up from $25,963 in the third quarter of last year. Car loan lengths were also slightly longer -- 65 months for the third quarter of this year versus 64 months for the same period last year.
As a result, the average monthly payment was nearly flat, $458 per month versus $464 for the third quarter of last year, even though the total car loan amount increased.
Car leasing also continued to be a big part of the current automotive market, accounting for 27.22 percent of all new car financing. This was up from 24.02 percent in the third quarter of last year, but it represents a slight drop from 27.64 percent in the second quarter of this year. Average car lease payments also dropped slightly from $409 in the third quarter of 2012 to $404 in same quarter this year.
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.