U.S. car buyers are more comfortable about adding extra features to their new vehicles as auto loan interest rates drop and loan terms become longer.
The average transaction price in November is $30,634, according to auto pricing information source TrueCar.com.
There are also more buyers purchasing steeply priced, luxury vehicles. The sales of these vehicles rose to 11 percent this year, surpassing the entire industry. Competitive leasing programs largely contributed to that growth.
New-car buyers borrow more money this year as new vehicle prices continue to rise.
Experian Automotive recorded the highest average loan amount in six years. In the third quarter of this year, the average loan amount jumped to $26,719, up by $756 from the same quarter last year.
But despite taking out record auto loans, buyers were able to repay them with low monthly payments. The average monthly payment is $458, up by only $6.
Buyers are confident to pay more for their cars because auto loan interest rates are down. The average interest rate for auto loans reached an all-time low of 4.27 percent in the third quarter of 2013, Experian data shows.
Lenders are also willing to extend repayment periods to up to 84 months or seven years. The average loan term for a new car loan is now 65 months, a month longer than last year.
Over 40 percent of new auto loans distributed this year are five to six years long. And the number of buyers taking out auto loans that are up to seven years long went up to 19 percent from 16.4 percent in the same period in 2012.