I have to admit, I once bought a new car. I was in my mid-20s. I had no children. I still didn’t know the fun of a mortgage. The car was blisteringly fast and I like cars which go fast. So I bought one fresh and new. I shouldn’t have.
Every car since that ridiculously enjoyable little beast has been used. Each time I have been pleased for the most part with my purchase. The key to this general satisfaction has been the lack of sharp pain felt (from shooting myself in the foot) when I sign the title on the new (to me) used car.
To different folks different strokes though. Some people, a lot of people, would just rather buy (or increasingly lease) a new vehicle. It’s worth it to them to lose thousands of dollars as they roll off the lot I suppose. (Clearly it must be worth it because people do it.) And I’ll admit this too. If money was absolutely no object I’d buy new cars all the time.
But for me money is an object. It is for most Americans, yet many people still want that new car and they are taking on huge piles of debt to get one. This is a shame.
But the banks are happy to oblige.
A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.
According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.
“It’s not surprising buyers are borrowing more,” said Melinda Zabritski, Experian’s senior director of automotive credit. “If you look at the most popular segments, they are full-size pickups and SUVs. It’s hard to find one of those models new and fully loaded for under $30,000.”