Americans bought new cars at a record clip in spring. As COVID-19-related lockdowns began to ease, sales of both new and used cars set records.
As new car sales have soared, so has new debt. According to new numbers from Equifax, Americans took on more new car loans and leases in March than in any previous month on record.
The total balance owed on those loans also hit a record — $73.6 billion. Equifax did not report the average interest rate for new car loans, but experts have predicted that it will fall throughout 2021.
The trend appears to have continued after March. Equifax doesn’t have auto loan figures broken out separately. But it reports that auto loans and leases, general-purpose credit cards, and personal loans were up 39% in April compared to the same period in 2020. They were 11% higher than in April of 2019.
The data, the Wall Street Journal reports, show “quite the reversal from 2020, when many people shunned credit cards, personal loans and other types of debt. Some didn’t need to borrow because stimulus checks, expanded unemployment benefits, and a surging stock market padded their checking accounts.”
But car prices have pushed consistently higher through the first half of the year. The average transaction price paid for a new car hit an all-time high in June, at $42,258. More surprising, in June new vehicles sold at an average of 99.9% of the manufacturer’s suggested retail price (MSRP).
The numbers may begin to fall, not because demand for new cars is falling, but because high prices are pushing some shoppers out of the market.
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July 13, 2021 at 12:37AM
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Report: Americans Taking Out Record Number of Car Loans - Kelley Blue Book
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