SCHAUMBURG, Ill. (6/2/15)--Longer-term auto loans continue to gobble up a higher share of all auto loans, a recent report from Experian Automotive has found.
According to the report, new-vehicle loans carrying payback terms between 73 and 84 months--between six and seven years--made up 29.5% of all new vehicles financed in the first quarter--an 18.6% jump on an annual basis.
This marks the highest percentage on record.
Further, used-vehicle loans with payback terms of 73 to 84 months climbed to a record-breaking 16% of the total market, nearly a 13% jump year-over-year.
“While longer term loans are growing, they do not necessarily represent an ominous sign for the market,” said Melinda Zabritski, Experian senior director of automotive finance. “Most longer-term loans help consumers keep monthly payments manageable, while allowing them to purchase the vehicles they need without having to break the bank.”
Overall, the average loan term for both new and used vehicles climbed by one month, reaching 67 and 62 months respectively. These are both all-time highs.