Consumers Getting More Car Loans, Not Home Loans - Finance

  December 21, 2015

Rather than struggling to get approved for a new home loan or refinance, Americans are instead financing cars, where getting a loan approval is easier. The ability of fresh loans available to car buyers is also helping to elevate auto sales dramatically throughout the country.

This past quarter, auto loans outstanding reached $1 trillion for the first time ever. The amount of total auto loans is rising faster than the amount of mortgage loans. The average car loan is approximately $21,700, with the average monthly payment at $400. The average purchase price now stands at about $32,529. Economists have always placed a value on home mortgages, an indicator of economic growth, since homeowners must eventually furnish and maintain their valuable purchase. But now, the amount of auto loans being made is tracked by economists as yet another indication of consumer spending ability. An improving job market and stable wages have allowed consumers the ability of obtaining larger loans on more expensive cars.

 

Source: Federal Reserve

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