Tesla (TSLA) owners are likely to have the highest average credit scores, according to a new study by LendingTree.
And the reason may ultimately come down to cost.
The study published this week — which looked at more than 35,000 used auto loans made on the platform and ranked car brands based on buyers’ average credit score — found that Tesla buyers had the highest average credit score at 740, followed by Porsche and Lexus owners.
Chrysler drivers on the other hand had the lowest average score at 656.
Tesla owners have the highest credit scores
Porsche and Lexus owners followed closely with buyers boasting a credit score of 727 and 699, respectively.
The correlation between credit scores and cost is obvious: luxury cars are expensive, hence the auto loan taken out requires a higher credit score.
But what’s not obvious is the fact that Tesla cars were the costliest among all luxury vehicles.
One clue: According to a separate study, used Teslas were found to be more expensive than Porsches, with buyers spending an average of $54,234 on the electric vehicle versus $42,173 on the German car.
That means those Tesla owners would need to make monthly payments at $818, while Porsche owners only pay $635.
Additionally, Teslas also demand high monthly premiums, which also drive up the overall cost of owning the car.
Tesla CEO Elon Musk said he was addressing the issue on the company’s latest earnings call and is expected to offer an insurance solution that could save some money for leaseholders in the next few weeks.
Chrysler, Kia, Nissan owners have the lowest credit scores
At the other end of the list, family-friendly Chrysler came in dead last, followed by Kia and Nissan.
Its low ranking was in part due to Chrysler being the brand “with one of the lowest market shares and fewest models,” as well as the fact that buyers only needed a credit score of 656 to to secure an auto loan.
The study did qualify that while Chrysler falls in the lower end, 656 is still in the “fair” range and “it’s also right around the average credit score for all used car purchases.”
Rising auto loan delinquencies
And with a record number of outstanding loans going delinquent, credit scores are an important indicator of affordability for lenders.
The New York Fed earlier this year noted a “sharp worsening in the performance of the loans held by borrowers under 30 years old between 2014 and 2016.”
Millennial borrowers — between ages 18 to 39 — had the worst delinquency rates compared to other demographics.
Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.
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