As new car prices further go up in the United States of America (USA), more and more consumers are now opting for used vehicles. This change in the buying pattern touched a new high in the second quarter of 2022. According to a report released by credit reporting company, Experian close to 62 per cent of vehicle loans taken in the Q2 of this calendar year were for used cars. There has been a steady rise in used car loans compared to Q1 2022 when it stood at 60 per cent. The growth was even higher when compared to the same quarter last year when used car loans accounted for 58 per cent of total vehicle loans taken in the US in Q2 2021.
Also Read: Used Car Loan: 7 Things You Need To Know
The report published by Experian says that car buyers are opting for used cars over new ones more than ever before. However, this doesn't mean the situation is any different in the used car space. Prices of used vehicles are also going up in the US, which is why even used car buyers are borrowing more. In Q2 2022, the average used vehicle loan jumped 18.7 per cent to $28,534, close to Rs. 23 lakh. At the same time, the average monthly payment for a pre-owned vehicle stood at $515, or over Rs. 41,000, which is up 17 per cent.
In Q2 2022, the average used vehicle loan jumped 18.7 per cent to $28,534, close to Rs. 23 lakh.
Also Read: Buying Used Cars: Things To Know About Used Car Loans
Despite the Federal Reserve's efforts to cool the economy by raising interest rates, prices of new vehicles in the United States have been rising faster than the overall inflation rate for much of the year. Automakers say they still cannot keep pace with demand because of shortages of semiconductors and other supply chain snarls.
According to the Experian report, the average monthly payment for a new vehicle loan rose to $667 or over Rs. 53,000 in the second quarter, up nearly 15 per cent from a year earlier. The average amount borrowed rose 13.2 per cent, with the average new vehicle loan touching a record-high of $40,290 or Rs. 32.20 lakh. The report also revealed that the majority of new car buyers opted for sports utility vehicles, as out of the total number of vehicles financed in the second quarter, 60 per cent were SUVs, Experian said.
