Car buyers with the best credit records are shifting gears, with more of them taking out loans for used vehicles instead of new ones. That's one of the findings of the latest report on auto loans by Experian Automotive.
"One of the biggest trends we continue to see is the shift into used vehicles by customers with excellent credit," said Melinda Zabritski, senior director of automotive finance for Experian.
In the second quarter of this year, 43.3 percent of consumers with the highest credit rating who took out an auto loan, did so to buy a used vehicle. That's 10 percent more than the same time a year ago.
Meanwhile, 59.9 percent of consumers with prime credit ratings (one grade below super prime) borrowing to buy a car, truck and SUV in the second quarter, also chose a used vehicle. That's a 6.6 percent increase over the second quarter of 2015.
Why are more consumers with the highest credit scores turning to used vehicles instead of buying new ones? Perhaps it's because new vehicle prices have surged to new highs with the average transaction price in August topping $34,000 according to Kelley Blue Book.
As a result, the average amount borrowed for a new vehicle has steadily climbed higher, hitting $29,880 in the second quarter, according to Experian.