It was once nearly unheard of, but now, the seven-year car loan is pretty much par for the course for one simple reason: it's the only way most normal folks can afford to own new cars. Average car prices have risen about 28% over the past five years and are sitting right below $50,000. I don't know about you, but I don't have 50 large just sitting in my pocket.
Because of that, people are doing everything they can to bring their monthly costs down. Compared with a five-year loan, a seven-year loan can be the difference between $1,000 per month and $780 per month, according to Bloomberg. On the surface, that's a mighty tempting proposition, and it's why seven-year loans represented 21.6% of all new-vehicle financing in the second quarter of 2025. Six-year loans, which are now the most common, made up 36.1%. Somewhat worryingly, there's a growing trend of buyers opting for eight-year loans, but it's still just a small percentage.
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