The used-car market saw an even bigger upswing in financing. Fifty-six percent of used-car purchases were financed in the second quarter, up from 47% five years earlier.
The used-car market also saw a 13% increase in average vehicle financing between the second quarter of 2010 and the same period this year.
By lengthening loan terms, lenders can make bigger loans without requiring the car buyers to make larger monthly payments.
The average monthly payment for a used car was $361 in the second quarter, which was up 2% from a year earlier and 5% from five years prior.
During the second quarter, the 30-day delinquency rate for bank loans arranged through auto dealers was 1.58%, according to the American Bankers Association. That was up slightly from 1.53% a year earlier, but still well below the 2.60% delinquency rate hit in the third quarter of 2011.
Delinquency rates were also significantly higher in Texas - 34% higher than in Florida, and 69% higher than in California.