Cars are getting more expensive every year, along with everything else—gas, food, rent, etc. But that doesn’t make cars any less critical to the average American. Car loans make nicer, more reliable cars accessible to more people, but according to the latest data, more folks than ever are stretching their loan terms to afford them.
Experian Automotive reports that nearly a third of buyers are taking out loans longer than 6 years to try to reduce monthly payments. Over 35 percent of new cars are financed longer than six years, compared to just 31 percent a year ago.
A similar trend emerged in the used market, with 32 percent of used cars on loans longer than six years, compared to 29 percent a year ago. The average loan amount for new vehicles increased by $2,150 year-over-year, reaching $43,925, which is a significant increase.
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