Amid a pandemic, limited inventory and skyrocketing car prices, the car buying experience in the United States has seen major changes over the past two years. To illustrate trends in 2022 so far, Experian looked at the evolution of the number of auto loans held by US consumers.
Americans held a total of 80.2 million auto loans in the first quarter (Q1) of 2022, a decrease of 1% from the same period in 2021. Still, this represents a jump of 4% from the low from the pandemic era of 77 million car loans. accounts in Q1 2020.
When stay-at-home guidelines came into effect in many places in March 2020, some car dealerships were not allowed to remain open as essential businesses, while others reduced capacity and hours of operation. ‘opening. Automakers including Ford and GM closed assembly plants at the urging of their unions, which were concerned about worker safety. Car manufacturing and sales fell rapidly.
Almost all automakers saw their sales fall in the first quarter of 2020, and the seasonally adjusted average annual rate of car sales fell from 17 million in February 2020 to 11 million in March 2020. In March, new vehicle loan terms fell. also hit a record high as they reached their longest term. already. This metric had already increased in previous years, and average loan repayments also increased, according to Edmunds’ research.
In 2021, many dealerships have fully reopened, historically low interest rates have made financing a vehicle historically cheap, and car sales are up again. In the first quarter of 2022, US car owners paid a national average monthly payment of $568, according to data from Experian. But a new problem arose: there were not enough vehicles to meet the demand. The scarcity of newer model selection was triggered by a number of factors, including a shortage of semiconductor chips from Asia, a headwind that is still slowing the industry’s recovery today. Used cars were, and remain, in particular demand as car buyers sought more availability and more options for color and trim packages.