"With the average loan amount for new and used vehicles hitting all-time highs, we are seeing the need for affordability drive consumer purchasing behavior," said Melinda Zabritski, Experian's senior director of automotive finance. "Our latest research shows an $11,000 gap between the average loan amount on a new and used vehicle — the widest we have ever seen. This upward trend is causing many consumers to find alternative methods like extending loan terms, getting a short-term lease or opting for a used vehicle to get what they want while staying within their monthly budget."

For consumers who still want to drive something new, leasing a new vehicle costs an average of $92 less per month compared with financing. The average monthly payment for a new leased vehicle is $414, versus $506 per month for a new vehicle purchase. The number of consumers who chose to lease a new vehicle increased slightly from 28.87 percent in Q4 2015 to 28.94 percent in Q4 2016.

Auto loan market shifts to prime customers as loan delinquencies show slight increases

Another key finding in the report is the increase in delinquency rates year-over-year. Thirty-day delinquencies inched up slightly from 2.42 percent in Q4 2015 to 2.44 percent in Q4 2016, while 60-day delinquencies increased from 0.71 percent to 0.78 percent.

In response to these increases in delinquencies, lenders continue to adjust their lending strategies by shifting more loans toward customers with better credit. For new vehicle loans, the average credit score moved from 712 in Q4 2015 to 714 in Q4 2016. For used vehicle loans, the average credit score jumped five points from 649 in Q4 2015 to 654 in Q4 2016. Overall, lending to deep-subprime and subprime customers decreased from 22.05 percent of the total lending market in Q4 2015 to 20.82 percent in Q4 2016. Lending to prime and super prime customers jumped from 57.86 percent in Q4 2015 to 59.41 percent in Q4 2016.

"Delinquencies are always an important indicator of the overall health of the automotive lending market, but it's equally important to watch how lenders react when they see a rise," Zabritski said. "The shift to a higher percentage of prime and subprime customers is a natural consequence of the slight growth in delinquencies. Overall, we are still looking at a very healthy lending market."

The report also showed that used vehicle financing grew to 41.85 percent in the super prime consumer segment, an increase of 5.4 percent year over year. Moreover, used franchise and independent vehicle dealers saw their biggest year over year increases in super prime consumer lending, with 5.91 percent and 13.8 percent, respectively. 

Other key findings for Q4 2016:

• Total open automotive loan balances reached a record high $1.072 trillion in Q4 2016, up from $987 billion in Q4 2015; however, year-over-year growth is continuing to slow.
• Banks lost market share of total vehicle financing, dropping from 35.6 percent in Q4 2015 to 32.9 percent in Q4 2016.
• Credit unions and captives increased market share of total vehicle financing, growing to 19.1 percent and 28.4 percent — up from 18 percent and 27.8 percent, respectively.
• The average monthly payment for a new vehicle loan was $506, up from $493.
• The average new vehicle lease payment was $414, up from $412.
• The average monthly payment for a used vehicle loan was $364, up from $359.