Consumers financed their highest average on record for auto purchases during the final quarter of 2015 according to a report by Experian Automotive. Their average monthly payments also reached new highs.

Released in March 2016, the report states that the “average amount financed for a new vehicle in the fourth quarter increased by $1,170 from the prior-year period to $29,551 — the highest level recorded by Experian” while “the average monthly payment also rose $11 from a year ago to a new high of $493.”

Other fourth-quarter statistics suggest auto dealers would benefit from offering creative payment options to consumers:

• Leasing reached a record 33.6% of all new financing with an average payment of $412.
• Reliance on financing continued to grow, with 85.9% of all new vehicles and 54.7% of all used vehicles sold having been financed.
• Used-vehicle loans equaled 62.8% of all financing at an average of $18,850 per sale.
• Average monthly payments for used vehicles were $359 with a payment gap between new and used widening to an all-time high of $134.
• Average credit scores for new-vehicle loans decreased by one point to 711 from the prior-year period.
• Average credit scores for used-vehicle loans increased by one point to 649.
• Average interest rates for new-vehicle loans were 4.63% while the average for a used-vehicle loan reached 8.78%.
• Average loan terms for new and used vehicles held steady at 67 months and 63 months, respectively.

Analysis

The collective takeaway is that consumers are stretching their dollars to buy vehicles, even if it means paying more each month for a larger loan. There is also reason to believe used-car buyers face even greater challenges since they represent almost two thirds of financed purchases, have lower credit scores, and are willing to pay higher interest rates.

Dealers can make it easier to buy a car by offering favorable payment solutions from CrossCheck. Multiple Check (aka Hold Check) is a simple and cost-efficient way to increase sales. Checks are approved at the point of sale in seconds via terminal, phone or the web before being deposited at the bank. You then set up a payment plan with the customer to pay off the account within 30 days. It's not financing, there is no credit check and we guarantee the revenue to you. Download the free insider's guide to get started now.