Credit reports company Experian says that drivers opt for Used vehicles on new more than ever before. In the second quarter of 2022, 62% of car buyers financed a used car, which is a steady increase from 60% at the start of this year and an even bigger increase from the same quarter of the year. last year at 58%, according to Automotive News.
While American car buyers have always opted for used cars, loan trends show used sales outpacing new sales by higher margins. In The previous years, total US auto loans were split around 59/41, with the largest number going to used cars. Based on Experian’s latest report, the split is now 62/38 as buyers try to avoid today’s higher prices for new cars.
This does not mean used car buyers are sheltered from higher auto prices, overall. As used cars become more expensive, used car loans reached record prices of up to $28,534, nearly $4,500 more than last year. Monthly payments for used car loans are now at $515, while loan terms have increased to record terms of 68 months.
And the typical used car shopper is different today than in the past. It’s not just savvy buyers looking for used cars who have already been hardest hit by depreciation. It’s not only the buyers with lower credit ratings. Experian claims that 77% of customers close to premium were funding Used vehicles. These are buyers with credit scores ranging from 601 to 660. But buyers of all credit levels are choosing used cars over new ones.
At the very least, Experian data shows that credit unions are increasingly popular with borrowers. Credit unions now hold almost a third of all used car loans, or about 29%, which is an increase of five percentage points from last year. Credit unions tend to have lower interest rates than banks and other lenders, which means used car buyers don’t take a bath with their $29,000, $500 per loan. months, for a used car.
Even though used cars are less expensive, buying any the car still looks dark. Experian’s car loan figures show that many buyers now have to choose between expensive used cars or even more expensive new cars. It’s no wonder more and more people are flocking to used car parks and skipping dealership showrooms.