Any one know the percentage of cars in the USA that the owner no longer has to make payments on?
This article says that the average loan length is 60 months, and the average car lifetime is 9.4 years. So, a first-order estimate would be a bit less than 50%.
Of course, not everyone takes out a loan when purchasing a car, and some people take out loans on used cars, and cars probably don’t die according to a normal distribution but a bathtub one. All of those would affect the numbers.
The percentage of cars in our driveway that are paid for is 100%. Both are 11 years old. They were both purchased used with cash.
Good for you. How does that answer the OP’s question?
Well, I’d think there’s a lot to be discovered from knowing whether a car’s new or used for this.
For example, if a car’s new(or first owner), it’s likely to be financed if the car’s under some certain age point, and if it’s used, it’s a lot more likely to be paid off over some certain age point.
I don’t know what those age points are though.
It might possible to answer the question by checking what percentage of titles are in the owner’s name vs in the name of a bank or finance company.
Not in Michigan. We have liens, but the title is in the owner’s name (the owner being the person who bought the car, not the bank; that’s what the lien is for).
Perhaps she was expecting the other 278 million Americans who own cars to post the status of their vehicles as well. Then the OP just needs to count up the ones which are paid off.
This site claims that 73% of new cars are financed. I’m going to assume that that’s for US sales only.
So, if 73% of new cars are financed, the loan lasts 5 years, and the car lasts 9.4 years, you get 0.73 * 5/9.4 = 39% of personally owned cars on the roads are still under the original loan.
That still doesn’t take into account leased vehicles, corporate vehicles, or vehicles that are refinanced after the original purchase (either due to being resold or just to raise some money for the owner).
Indeed, since another figure shows that the average US new-car buyer changes cars in just over 5 years (63.9 months), cited in a NY Times article earlier this year as a record high (though their cite-link to Polk Research doesn’t seem to work any more):
So if 73% of new cars sold are financed for up to 5 years, and on average they’re passed into the used car market soon afterwards for the remaining 4+ years of average lifespan, we need to account for how many used cars are financed.
I think these figures also reflect the prevalence of 4- or 5-year lease agreements, which may get accounted for as a 4- or 5-year loan with a guaranteed buy-back option (along with potential condition and mileage penalties).
That might also be the situation in other states; I have no experience with financing a car, so I would’t know. Do the DMV records show liens against autos?