Average New-Car Down Payment Hits Near-Record High, According to New Edmunds Analysis
A strong economy gives shoppers confidence to put hundreds more down up front to drive away in their dream car
SANTA MONICA, Calif., June 2, 2017 /PRNewswire/ -- As interest rates climb and consumers stretch to afford increasingly expensive cars, buyers are showing signs of practicality by digging deep to put more money down up front, according to a new analysis from Edmunds, the leading car shopping and information platform. The amount of money car buyers put down to buy a new vehicle was up 6.5 percent in May to an average of $3,801 — an increase of $233 from a year ago, and $504 from five years ago. Down payments were up slightly on the used-vehicle side as well; used-vehicle buyers put down an additional $93 on average in May, an increase of 3.8 percent compared to May of last year.
"Buyers want pricier cars with more bells and whistles, leading to the troubling trend of trading longer loan terms for lower monthly payments," said Edmunds Executive Director of Industry Analysis Jessica Caldwell. "But now that interest rates are also on the rise, something has to give. In our increasing credit-based culture where consumers are willing to finance everything from cellphones to vacations, more money up front shows car buyers aren't completely sacrificing practicality in order to get the cars they really want."
The Edmunds analysis found that while the average loan term, monthly payment and amount financed on new vehicles have grown steadily over the past five years, each was only up about 1 percent in May compared to last year. This trend is also mirrored on the used side, with all three metrics showing slight dips in May.
More insight into recent auto industry trends can be found in the Edmunds Industry Center at http://www.edmunds.com/industry-center/.
| NEW-VEHICLE FINANCING TRENDS |
||||
| May 2017 |
Change from |
5-Year Change |
||
| Loan Term |
69.1 months |
1.1% |
6.6% |
|
| Monthly Payment |
$510 |
1.2% |
10.6% |
|
| Amount Financed |
$30,314 |
1.0% |
15.9% |
|
| APR |
5.0% |
12.7% |
14.9% |
|
| Down Payment |
$3,801 |
6.5% |
15.3% |
|
| USED-VEHICLE FINANCING TRENDS |
||||
| May 2017 |
Change from |
5-Year Change |
||
| Loan Term |
67 months |
-0.2% |
6.2% |
|
| Monthly Payment |
$385 |
-0.2% |
4.1% |
|
| Amount Financed |
$21,310 |
-0.9% |
11.3% |
|
| APR |
7.63% |
4.5% |
-7.8% |
|
| Down Payment |
$2,529 |
3.8% |
12.3% |
|
About Edmunds
Edmunds is the leading car information and shopping platform, helping millions of visitors each month find their perfect car. With products such as Edmunds Your Price, Your Lease and Used+, shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at more than 13,000 dealer franchises across the U.S. Edmunds' in-house team of unbiased car-shopping experts provide industry-leading vehicle reviews and shopping tips, as well as welcome all car-shopping questions to the free Shopper Advice line at 1-855-782-4711, via email at [email protected], via text at ED411 and on Twitter and Facebook. The company is regarded as one of America's best workplaces by Fortune and Great Places to Work. Edmunds is based in Santa Monica, California, and has a satellite office in downtown Detroit, Michigan.
Contact:
Monica Favorite
Edmunds Corporate Communications
www.Edmunds.com
Media Hotline: 310-309-4900
[email protected]
SOURCE Edmunds
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