Record highs for new car loan amounts

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The average amount that most Americans are financing for a new car loan as well as their average monthly payment have hit all-time highs, according to the latest data from Experian Automotive.

Many Americans are turning to car leasing

According to the company’s latest State of the Automotive Finance Market, Americans were financing $29,551 on average for a new car in the 4th quarter of 2015, an $1,170 increase over the 4th quarter of last year, while the average monthly payment rose to $493 from $482 over the same time period.

Because of the record highs and the fact that people often buy a car based on the monthly payment, many Americans are turning to car leasing or buying a used car instead of buying new.

“In order to stay within their budget goals, we have seen that more consumers — even those within the prime and super-prime risk categories — are turning to car leasing and used cars as cost-effective alternatives to buying new,” said Melinda Zabritski, senior director of automotive credit for Experian Automotive. Used car loans represented 62.8% of all car financing, while leasing made up 33.6% of all new car financing.

5 top car models

The average lease payment for the 4th quarter of 2015 was $412, $81 less than those buying a new car, with the top 5 car models being leased Honda Civic, Honda Accord, Toyota Camry, Toyota RAV4 and Ford Escape.

The average monthly car payment for a used car was $359, bringing the $134 gap between new and used monthly payments to an all-time high. The average car loan interest rate for a new auto was 4.63%, while the average for a used car loan was 8.78%.

If you are car shopping, follow these Top 10 tips for buying the right new or used car in 2016.

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.