How car loans compare by generations | entertainment news

Auto loan data provides some interesting insights into how consumers of different ages tend to finance their vehicles. Experian analyzed its consumer debt data to examine how the number of car loans, average borrowing costs, and missed payments vary across generations.

A notable trend is that US consumers born between 1965 and 1980 are more likely to have multiple auto loans. These Generation X vehicle owners also spend the most on average monthly car bills compared to other age groups. And whether the vehicle is a workhorse pickup or a luxury convertible, the data suggests that the older the vehicle owner, the less likely they are to pay for it.

This pattern may also be consistent with what is known about differences in wealth accumulated by different generations. According to data from the Federal Reserve Bank of St. Louis, as of early 2022, Millennials were still lagging behind the wealth levels of Gen Xers and Baby Boomers when they were at the same points in their lives.

Generation Z and Millennials, who are more likely than older generations to have a single car loan, saw their average monthly car payments increase the most year-over-year in 2022. Gen Z is between the ages of 9 and 25, and it’s too early to say what the financial habits of the group’s adult consumers – aged 18 to 25 – will be. Younger Americans are more likely to borrow money to buy a car than any other generation, according to Experian’s latest auto loan data. They are also more likely to have trouble paying for cars.

Of course, car owners of all ages have seen the cost of new vehicles skyrocket since spring 2021, triggered by a surge in demand due to computer chip shortages and other supply chain constraints. But even before the pandemic, sticker prices had been rising steadily. At the end of the first quarter of 2013, the average cost of a new vehicle was $31,526; by the first quarter of 2022, it had risen to $45,927, according to the Kelley Blue Book.

As prices have risen, loan terms have become longer than ever, which has also helped change car loan habits. Read on to see how these trends have shaped the financial landscape for generations of US car owners.

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