ARLINGTON, VA – Automobile loan terms continue to stretch to help make monthly payments affordable, while credit quality improved, according to the Consumer Bankers Association's (CBA) 2005 Automobile Finance Study.

Loan maturities on new vehicles more than 60 months now represent more than double the percentage reported in the 2000 report (45 percent at year-end 2004 versus 40 percent in 2003 and 21 percent in 2000.)

Eighty-eight percent of new car loans are now longer than 48 months, up from 85 percent a year earlier. Survey respondents, including banks and captive finance companies, reported policies that allow average maximum maturities of 77 months, up from 73 months a year earlier.

Average new- and used-vehicle loan delinquencies continued a three-year declining trend. Average new-vehicle dollar delinquencies fell to .97 percent compared to 1.19 percent in 2003, and used-vehicle delinquent dollars averaged 1.66 percent, down from 1.71 percent in 2004.

Credit quality, as defined by average credit scores for new- and used-vehicle loans, has slightly increased to 722 from 718 a year earlier.

The average new-vehicle loan size decreased by 2 percent to $22,638 from $23,076 a year earlier, the first decline in recent history. The average used-vehicle loan size decreased by 3 percent to $15,961 from $16,521 a year earlier.

In a section on floorplan financing, the CBA study reports that the percentage of lenders that charged flat fees increased by approximately 25 percent on new and used vehicles.

Auto lease terms greater than 48 months represented 6 percent of new-vehicle originations, compared to 14 percent a year earlier. On average, 22 percent of leases did not reach full-term, half the percent reported a year earlier.