Longer interest rates and longer loan terms made it easier for consumers to finance a vehicle in the fourth quarter of 2012.

According to Experian Automotive, average loan terms for a new vehicle during those three months jumped to an all-time high of 65 months, up from 63 months in Q4 2011.

Experian's Q4 State of the Automotive Finance Market report also showed that the average loan amount for a new vehicle was $26,691 in Q4 2012, up $272 from Q4 2011, while the average used vehicle loan was $17,629 in Q4 2012, up $239 from Q4 2011.

While consumers are taking out larger loans, lower interest rates and longer loan terms for new vehicles helped bring down the average monthly payments. Experian said the average monthly payment for a new vehicle dropped from $468 in Q4 2011 to $460 in Q4 2012.

The average interest rate for a new vehicle loan in Q4 2012 dropped to 4.36%, from 4.52% in 2011. The average interest rate for a used vehicle loan dropped to 8.48%, from 8.67% during the same time period, according to the report's data.

“Lower interest rates and longer loan terms made it easier for consumers to finance a vehicle while keeping their payments affordable,” said Melinda Zabritski, director of automotive credit for Experian Automotive. “This, combined with the fact that more vehicle loans went to consumers with credit outside of prime, portends a vital and healthy automotive market.”

More consumers also were able to obtain financing in Q4, as average credit scores for both new and used vehicles dropped, according to Experian. For new vehicle loans, the average consumer credit score was 755 in Q4 2012, down six points from Q4 2011. For used vehicle loans, the average consumer credit score dropped to 665 in Q4 2012, down five points from Q4 2011.

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Favorable Loan Terms, Low Rates Push Monthly Car Payments Down: Experian

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