Car buyers are borrowing record amounts to pay for their new rides, a trend driven by high prices, favorable loan rates, and shoppers opting for in-car gizmos.
Experian Automotives said the average amount climbed to $27,000, a new high.
Andrew Burton / Getty Images
Harry Lindback, of Dearborn Heights, MI, shops for cars at Bill Brown Ford Dealership on September in Livonia, Michigan.
The payments are rising at the same time that an increasing number of car buyers are opting to stretch their loans over six or seven years. That means buyers are borrowing more money, for longer periods of time.
According to Experian, a record 20 percent of all new car auto loans in the fourth quarter were more than six years in length.
"It's not surprising buyers are borrowing more," said Melinda Zabritski, Experian's senior director of automotive credit. "If you look at the most popular segments, they are full-size pickups and SUVs. It's hard to find one of those models new and fully loaded for under $30,000."
The average transaction price—or the amount buyers are paying at dealerships—climbed 1.9 percent to $32,160 in February, according to Kelley Blue Book. That amount ticked up as car buyers added on more options, like navigation systems, in-car connectivity and infotainment systems.
—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.
First published March 4 2014, 8:02 AM
Philip J. LeBeau is a CNBC auto and airline industry reporter based at the network's Chicago bureau. He is also editor of the Behind the Wheel section on CNBC.com.
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Prior to joining CNBC, LeBeau served as a media relations specialist for Van Kampen Funds in Oak Brook Terrace, Ill. Previously, he held general assignment reporting positions at KCNC-TV, the CBS affiliate in Denver, and KAKE-TV, the ABC affiliate in Wichita, Kan. LeBeau began his career as a field producer at WCCO-TV in Minneapolis, where he wrote, produced and researched consumer stories. He graduated from the University of Missouri-Columbia School of Journalism with a bachelor's degree in journalism and broadcasting.