Do not look now, however the common month-to-month mortgage cost for a brand new automobile is approaching $600 in accordance with Experian, which analyzes tens of millions of latest and used car loans.

“We went up increased quantities 12 months over 12 months in 2020 than we ever actually have earlier than and hit file highs in mortgage quantities and file highs in funds,” stated Melinda Zabritski, senior director for Experian’s automotive monetary options crew.

Experian’s newest auto financing report covers the fourth quarter of final 12 months when new car gross sales improved, however had been nonetheless properly under the tempo of gross sales in 2019.

Nonetheless, these taking out loans to purchase a brand new car borrowed a mean of $35,228, a rise of virtually $2,000 from a 12 months earlier. Because of this, month-to-month mortgage funds jumped $13 to a file excessive of $576 in accordance with Experian. Loans for used autos additionally hit all-time highs, with shoppers borrowing a mean of $24,467, up virtually $1,700 12 months over 12 months.

Experian says month-to-month funds for used auto loans jumped $18, to $413 — the primary time the typical topped $400.

“I can definitely keep in mind when that ($400) was the typical cost for a brand new automobile,” stated Zabritski. “These days are gone. We’re definitely over $400 and do not anticipate to see that come down.”

Auto loans and funds are getting greater as a result of the worth for all autos is rising at a tempo few may have predicted a couple of years in the past.

What’s behind the upper sticker costs?

For brand spanking new autos, the demand for bigger and costlier SUVs and pickups means consumers are keen to pay extra. Patrons are also more and more choosing fashions with extra tech options from infotainment to driver-assist techniques that assist forestall accidents.

Used automobile and truck costs are climbing as a result of higher demand in the course of the Covid-19 pandemic. That additional tightened the already-strong used automobile market, the place roughly 40 million autos had been bought final 12 months in accordance with Zabritski.

Regardless of the elevated borrowing and better funds, the variety of shoppers defaulting or falling behind on their auto loans stays under the historic common.

“A lot of the lenders I am speaking with and have had discussions with for the reason that center of final 12 months have all stated that they don’t seem to be seeing the delinquencies that they anticipated to see,” stated Zabritski. “So shoppers have achieved a great job of staying present and holding these funds going.”