Whether U.S. consumers are purchasing a new or a used car, the odds are very high that an auto loan is involved. Some 85.5% of all new car buyers and 53.1% of used car buyers financed vehicle purchases in the third quarter of this year.

The total U.S. open automobile loan balance for the third quarter was $1.12 trillion, up from $1.06 trillion in the third quarter of 2016 and up from $968 billion in the same quarter of 2015. Banks hold 33.0% of the outstanding balance while dealer captive finance holds 22.8%, credit unions hold 27.2%, and finance companies hold 16.9%.

The average loan amount for a new vehicle reached $30,329, up $291 (about 1%). Loans to purchase a used car averaged $19,291, up $56 year over year. The data were reported earlier this week by Experian Automotive.

The better a car buyer’s credit rating, the lower the available interest rate on a car loan. No surprise there, but the gap is substantial. A super-prime buyer (credit score of 781 or higher) paid an average of 3.1% interest in the third quarter. A deep-subprime buyer (credit score 300 to 500) paid an average interest rate of 13.95% 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 3.86% to buy a used car from an independent dealer while a deep subprime buyer paid an average interest rate of 20.39%. Interestingly, rate increases were a few basis points higher for super-prime borrowers than for deep subprime borrowers.

Other data points culled from the study:

• The average credit score for a new vehicle loan rose by one point to 713 year over year.
• The average credit score for a used vehicle loan increased four points to 659.
• In the third quarter, the average monthly payment for a new vehicle hit $502, up by $6.
• The average interest rate for new vehicle loans to all borrowers rose to 5.1%, up 39 basis points.
• Loan terms for new and used vehicles increased from a year ago to reach 69 months and 64 months, respectively.
• Leases accounted for 29% of all new car sales.
• Lease terms slipped slightly to average 36.09 months in the third quarter.

Nearly 20% of loan balances are owed by deep subprime (3.87%) and subprime borrowers (16.06%) with credit scores between 501 and 600. Loan terms averaged 69 months in the third quarter, up by 0.6 months compared with the third quarter of last year.

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