Whether U.S. consumers are purchasing a new car or a used model, the odds are very high that an auto loan is involved. More than 85% of all new car buyers and 54% of used car buyers financed vehicle purchases in the first quarter of this 2018.

The average loan amount to purchase a new vehicle reached $31,455, up $921 (about 3.0%) compared to the same period of last year. Loans to purchase a used car averaged $19,536, up $410 (about 2.1%) year over year. These are record highs for both new and used car averages, according to data reported Thursday morning by Experian Automotive.

Auto analysts at Kelley Blue Book have estimated that the average price of a new vehicle at the end of April had reached $35,411. The average transaction price on a midsize sport utility vehicle rose 1.3% year over year in April to $38,224, while the average for full-size luxury SUV rose 6.5% to a whopping $88,579.

The better a car buyer’s credit rating, the lower the available interest rate on a car loan. No surprise there, but the gap between the top and the bottom is vast. A super-prime buyer (credit score of 781 or higher) paid an average of 3.23% interest on a new car purchase in the first quarter. A deep-subprime buyer (credit score 300 to 500) paid an average interest rate of 14.07% on a new car.

The gap on used cars, especially at independent dealers that often finance their own sales, was even wider. A super-prime borrower paid an average interest rate of 4.04% to buy a used car from an independent dealer, while a deep subprime buyer paid an average interest rate of 20.65%.

The total U.S. open car loan balance for the first quarter of 2018 was $1.11 trillion, up from $1.08 trillion in the first quarter of 2017 (2.33%) and up from $1.01 trillion in the first quarter of 2016 (10.20%).

Banks hold 33.3% of the outstanding balance, while dealer captive finance holds 23.4%, credit unions hold 28.8% and finance companies hold 14.6%.

Other data points culled from the study:

• The average credit score for buyers of a new vehicle loan rose by two points to 719 year over year.
• The average credit score for buyers of a used vehicle loan increased three points to 655.
• In the first quarter, the average monthly payment for a new vehicle hit $523, a year-over-year increase of $15 and an all-time high.
• The average interest rate for new vehicle loans to all borrowers rose to 5.11%, up 37 basis points.
• Loan terms for new and used vehicles increased modestly from a year ago to reach over 69 months and over 64 months, respectively.
• Leases accounted for 31.06% of all new car transactions.
• Lease terms rose slightly to average 36.53 months in the first quarter.

Rising interest rates are likely to have an effect on auto loans, but automakers and dealers have been boosting incentives to keep their inventory moving. Popular vehicles like pickup trucks and SUVs have substantial margins built into the manufacturer’s suggested retail price (MSRP) and give automakers, particularly, a lot of room to maneuver. Upfront savings may more than offset higher borrowing costs, so it’s a good idea to sharpen your pencil and do the math.

The full report is available from the Experian website with free registration.

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