Monthly used vehicle loan payments continue to increase due to higher interest rates.
According to the mid-month Manheim Market Insights update, the average monthly payment was approximately $525 in mid-October.
“The rise in monthly payments is pretty staggering, and it’s across all credit tiers. Those price increases are felt differently depending on a consumer’s level of income,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotive.
For subprime borrowers, payments are around $550.
“Subprime monthly rates have risen by about 3 percent in the past year, and they’re 35 percent higher than pre-pandemic levels.” Robb said.
Even super-prime borrowers are paying 33 percent more than pre-pandemic, with payments more than $500. That is almost $100 more than March 2021.
“The average monthly payment for consumers continue to creep up as interest rates impact affordability,” Robb said.
Manheim noted that wholesale values were down 1.6 percent from September and were down 3.3 percent from October 2022.
Wholesale auction rates were at 53.6 percent.
“It remains at a decent level for the time of year,” Robb said.
The used retail inventory is 8 percent lower than last year.
